Jan 6, 2018

Weekly preview

Short term view - topping next week and waiting for reversal pattern.
Intermediate term view - near to the top of wave 3 from Feb.2016.

The sideway pattern resolved higher which is not a big surprises because one more rally and reversal pattern was missing. Now the pattern looks like finished 5 waves on multiple degrees. My count is the top of wave 3 from Feb.2016 with extended fifth wave(see long term update). In this case wave 5(414 points) should have the same size like wave 1 to 3(409 points). This was met this week. So either we see a topping next week and first signs of reversal.... or I do not know what pattern we have:)
Europe looks like almost finished huge expanded flat for wave B and should turn lower too. TomDemark finished sequential on daily/weekly/monthly all time frames aligned. Weekly RSI on crazy 85+, daily RSI overbought again makes a third peak. On the positive side market breadth looks strong. Curious how it will play out - I think we will see a topping for 2-3 weeks and a few false starts, but lower eventually.

Short term - in the last weekly post the last wave 5 was missing - this week we saw it.... I do not know how to extend the pattern with more impulses higher.

Intermediate term - in the final stage of wave 3. Overshooting the upper trend line and RSI double divergence does not look very bullish. Now waiting to see what happens.

Long term - one more correction and a rally before turning very bearish. The next wave lower will show us if the move from the Feb.2016 is over or not. I think it is not.

Market Breadth Indicators - some are showing strength other like McClellan indicators are weak. No reversal signal so far. I suppose topping and initial move lower with very deep retracement.
McClellan Oscillator - above zero , but no strength and double divergence.
McClellan Summation Index - buy signal, but is not following the price with strong move up.
Weekly Stochastic of the Summation Index - buy signal, in overbought territory .
Bullish Percentage - buy signal, very strong.
Percent of Stocks above MA50 - havering around 75 and yesterday some strength.
Advance-Decline Issues - weak making a lower high.
Fear Indicator VIX - notice how it reaches a low and stays there for 3 months followed by a spike higher. We are at the next lower low valley lasting 3 months already. I think the next spike higher is around the corner and it will make higher high breaking out of the wedge.

Day 34 of the 40 day cycle, a little bit extended.

Week 7 of the 20 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Finished countdown/combo on the daily chart. Now all time frames are aligned with finished patterns daily/weekly/monthly. In the next few weeks we will see how important is this signal.


  1. Krasi, great work! thank you. H

  2. Thanks Krasi,,, Beautiful as usual... Appreciate your time for sharing with us :)

  3. Hi Krasi,

    What do you think of soxx and xbi?



    1. SOXX the last decline look like an impulse, but the retracement is sooooo close to invalidate it.
      We have to wait a few days to see what happens... it is the same story like SPX either finished zig-zag(SPX wave v of 5 of 3 see hourly chart) or the impulse will be invalidated and we have some nested 1-2 i-ii (i) (ii) (see SPX the new post).
      XBI similar story - zig-zag lower and higher so either wave B of a flat correction or the move will continue higher... ED?

    2. It’s so interesting. Ibb looks like an impulse but xbi looks like abc corrective pattern. I thought yesterday’s drop confirmed resumption of down turn. Guess we shall see.

      I am looking for soxx as possible short at prior high as entry point and break above as exit.

      Thanks Krasi,