Intermediate term view - there is high probability this high to be the top for wave 3 from Feb.2016 low.
The indexes are higher this week, which is not a surprise - finished pattern was missing. Now we have enough waves and all indexes are showing possible finished pattern(right on schedule the end of January). It is not only the stock indexes which all are in sync now, If you remember in the last "Long term update" I said all asset classes are pointing to intermediate term trend change - I think the time has come. The USD took the short cut and just plunged lower for wave 5, the decline is either finished or we have small waves iv and v of 5. Bonds - TLT looks like finished triangle and reversal. Crude Oil has finished pattern and should reverse. Short volatility is not working despite the blow off. Short said I think we have several extremely overcrowded trades(short USD,short volatility,long Oil,long stocks) which are about to reverse. For stocks the monthly bar looks like exhaustion candle similar to March 2000 this is not the beginning of a trend it is the end. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I have shown short term charts in the last update - the same chart updated. Higher before FOMC then lower. Way too many shallow pullbacks in 2017 so you can't be sure where to start and end a wave. We have to wait and see the wave lower before we are sure that we have a top.
Intermediate term - expecting the top of wave 3 from the Feb.2016 low then 23,6% Fibo retracement.
Long term - switched to logaritmic scale. One more correction and a rally before turning bearish.
MARKET BREADTH INDICATORS
Market Breadth Indicators - the same like last week... strange blow off move Friday in the moon again and market breadth do not react at all. Starting to turn lower diverging with the stocks rally, but no strong sell signal. VIX and A/D spelling big trouble ahead.
McClellan Oscillator - below zero with multiple divergences.
McClellan Summation Index - something like double top, just crossed the signal line expecting continuation next week.
Weekly Stochastic of the Summation Index - turned lower and sell signal.
Bullish Percentage - something like double top, but no sell signal so far.
Percent of Stocks above MA50 - something like double top, but still above 75.
Fear Indicator VIX - hovering around 11-12 for weeks instead of around 8-9... big warning sign for me.
Advance-Decline Issues - very weak with double divergence, only a few stocks are participating in this rally.
HURST CYCLES
Day 18 of the 40 day cycle. It looks too stretched to me so I split it into two 40 day cycles. Usually for a bottom you have 2 or more closes below MA10, but we have so many crazy statistics with this rally so only one close below MA10 for 40 day cycle low is the least problem:)
Week 10 of the 20 week cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Week 12 for the countdown. One more higher high next week and it will be finished. This fits very good with the EW pattern.
Hi Krasi,
ReplyDeleteThank you for the great analysis. May I ask about your thoughts regarding XIV? My count is that we have all waves from Feb 2016 and that the last 5-th wave is either complete or there will missing final (v) to finish v-th wave from mid november. Большое спасибо for your time :)
Mily
I see XIV exactly the same way. XIV should make a top(VIX bottom) before the indexes and it looks like it will do exactly that.
DeleteHow high on xiv 146
DeleteIt should move lower with SPX, but if it turns higher something around 150.
DeleteThanks for the analysis. I assume we have just entered correction within larger wave Y on your long term HUI chart?
ReplyDeleteYes, some zig-zag higher should be running.
DeleteStraight to the moon!
ReplyDeleteKali
Not today:) tomorrow may be.
DeleteIs this the beginning of the correction?
ReplyDeleteKali
Yes, it looks like an impulse lower so more to the downside.
DeleteIt is too early I can not say if it is iv of 5 or 4 or iv of 3.... it should be some kind of fourth wave.
Xbi has made a big move down. Do you think there is more to the downside or another higher high. Thanks
DeleteI can not say at the moment... so far only two legs lower with the same size which is corrective. I need to see what happens in the next 1-2 days.
DeleteGiven how shallow dips have been for >12 months , we could be 1/A down complete today . Retrace to around 2840/50 next week maybe in 2/B..?
ReplyDeleteI think it is some wave 4. So far only a-b-c lower... it should take time so probably flat or triangle and wave B next week.
DeleteThere is an option for a finished correction and higher high with a divergence around 2900 until mid February, but it looks less likely at the moment.
What are your thoughts on TLT?
ReplyDeleteIt looks like impulse lower - continuation to around 115 and up to around 120.
DeleteHi Krasi, Taking into consideration the action of the past few days, do you still see TLT at 115 before the bounce? Thanks
DeleteIt accelerated lower when it should made an 20 week cycle low. This is bearish the triangle has been busted. It looks like impulse lower with missing series of waves iv-v 4-5.... a bottom around 117,5-118 up 120-121 down to 116,5-117 and so on. If I am right the decline will continue with choppy up and down for months and it will reach 115.
Delete