Intermediate term view - leg lower, more likely with higher low and higher again.
Higher to the MA50 daily this was obvious, the surprise is again the speed. We are in no man's land at the moment, at a point where different scenarios are possible. Until we see the next move lower no one can tell you for sure. This is wave 4, they are very notorious and the most difficult to predict. Usually you should not even think about trading. The difference this time is the swings are so huge it is tempting to trade them.
If this is wave 1 I do not like how fast and high it moves. The consensus is that we have wave c of B expanded flat and one more leg lower to finish the correction. I do not like it when everybody see the same. Why not "a of B" of a triangle?
I do not know.... is it B or 1 or something else, but I think we should see one more test of the low. I do not believe in V shape recovery. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - choppy move... it needs 4-5 4-5 to look like an impulse(green). If the indexes turn lower now the move will be just an a-b-c(red).
Intermediate term - I think we will see one more move lower. If it is 1-2(green) expect deep retracement 61,8% and test of the trend line around 2620. If it is B(red) wave C lower to around 2500. I will not be surprised if this is a of B from the triangle which I have shown previous week.
Long term - one more rally before the bull market is over.
MARKET BREADTH INDICATORS
Market Breadth Indicators - most turned up, but McClellan indicators are still bearish. I suspect at least a test of the low and higher low for the market breadth indicators.
McClellan Oscillator - moved above zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, reached oversold level.
Bullish Percentage - turned up, buy signal.
Percent of Stocks above MA50 - turned up, buy signal.
Fear Indicator VIX - moving lower after hitting 50, this is normal such levels are short living.
Advance-Decline Issues - turned higher, I expect to see one more higher low.
HURST CYCLES
Day 5 of the next 40 day cycle.
Week 12+1 waiting to see if wave IV is finished or not.
Hi Krasi,
ReplyDeleteFor qqq, what is your expectation for retracement? Do you believe xbi will turn higher?
Thanks,
Kali
The same patterns like the major indexes so I do not know.
DeleteI think one more high then bigger move lower, but with higher low.
how does the Demark Sequential look? no reverse yet?
ReplyDeletethank you
No price flip to the upside on the weekly chart so far.
DeleteBuy setup was finished last week on the daily and we see move higher. Sell setup at 3 at the moment.
thank you...
ReplyDeleteinteresting..
It seems your analysis is a good guide long term but intermediate to short term is hit or miss. I think any prognostic strategy is not good trading method. I see you often say i don’t see this going higher or lower but it does. That’s because instead of waiting for short term trend break, you predict.
ReplyDeleteI think you are a good analyst. One of the better ones i have seen. But it’s almost impossible to determine short term moves. Best we can do is just follow short term trend.
All these people here ask about what it will do Monday or Tuesday. How would anyone be able to predict the future with such accuracy? It would be an impossible task! It would be even more foolish to follow such an errant advice like it is an accurate predictor.
Your probably right we are topping. How it will do it is anyone’s guess. But i applaud your work.
Josonom
Exactly - the way I analyze markets does not fit for short term trading. I noticed it and 2-3 years ago I moved to intermediate or longer time frame. Since than trading is fun and profitable:)
DeleteIn the short term is 50:50 the price just can take a different path to the target.
For short term trading is necessary a different approach and set of rules.
It is not impossible, but it costs a lot of time and energy. I do not want to sit in front of the PC whole day. It should be trading for living not living for trading:)
Yes, very often the questions are what will happen in the next few days. If it is close to intermediate top/bottom I could say if I see the move as finished or not, but if it is somewhere in the middle is just 50:50 what the price will do on the next day.
Trading for living not living for trading! I love it. I think that sums up the two philosophies of people. Living for money or money for living.
DeleteKrasi -- any view here on TLT? From my cycle analysis, I see it bottoming out here. Do you see the same thing?
ReplyDeleteYes, it should be a low, but the 20 week cycle is getting too stretched. TLT should reverse and rally NOW or it is getting dangerous... and there is no such signs at least one more low is needed.
DeleteI saw a few times a low is expected and than price accelerates... not a pretty picture.
Pattern busted, price accelerates when it should make a low - when I see such thing I say no thanks and search for the next setup with low risk. Not interested in fishing the bottom.
Nice work.
ReplyDeleteWhat do you think of the following count at Nate's Market Analysis?
http://natesmarketanalysis.blogspot.com/
Not impossible, but with low probability. No signs of a top to support this scenario.
DeleteHi Krasi, you have been consistently bearish on DXY.
ReplyDeleteIt seems to me DXY has reached the end of its first 5-wave decline, and chances are high that it is now starting to make a deeper rebound (target 95 area)- something that will be supported by breakout (3%) in USGG10Y. Appreciate if you can offer your view on this. thanks again !!!
I was bearish and the USD did not disappoint:) It follows cycles and the EW pattern without surprises.
DeleteNow we are close to an intermediate term low and multi month move up. Short term either we saw the top or ED is running and this is wave 2 of it with 3-4-5 to follow... something around 87,50.
Then at least 50% retracement which is around 95.
USGG10Y - I think there is one pullback and one more high touching 3%, but then lower to 2,5%-2,6%
HI Krasi, just want to explore another possibility. For DXY, in your view, whats the likelihood that we are seeing a flat correction (since 3rd week of Jan)?
DeleteFor UST10Y, from what i can see is that since the 80s, every cycles (within the structural decline)would see UST10Y retrace min 50% of the previous cycle's top and bottom. If this is to stay, the min target for UST10Y is around 3.3% which i think may be used as an excuse to shake market. Can i know what you want to see first for you to consider min 3.3% as a likely target? many thanks!!!
DXY flat for iv of 5... it is possible, but the current move up does not look like a clean impulse. I like ED more.... it is more guessing in this case and I do not expect EW to give me the magic answer. At the end in both cases there is one more low which is buy.
DeleteI do not try to guess tops/bottoms any more. I have converted 1/3 of my account from Euro into USD and waiting to see how the bottom plays out. Diagonals flat lower/higher low it does not matter I will use the bottoms to convert the rest of the account and that is all.
UST10Y - First to see corrective wave 4 to be sure that we have an impulse, then you can measure wave 5. Currently if you assume impulse is running and if you take the usual Fibo measurements the target is around 3,2%.
Now it looks better like a flat correction:)
Deletethanks for your view. I have closed all my long DXY trades... still fine tuning my trading styles with wave analysis... i appreciate your works
DeleteHi Krasi.... so, it appears the battle of the 2700 levels might come to a conclusion today? are you still favoring the 4/5 missing on the upside versus the reversal to test the lows? what if we reverse now to the lows, does this mean the probability of actually testing the lows/making new lows is increasing then? thx again!!!
ReplyDeletejd
Yes, one more high looks more likely. If the move up turns lower now as a-b-c than I think we will see a complex correction triangle or combination.
DeleteHi Krasi, Does Jan-Feb2010 look familiar to this correction?
ReplyDeleteIt feels more like February 2007/Mai 2010/August 2011/August 2015
DeleteSo short term we are in wave 4? It looks quite confused now... Thanks.
ReplyDeleteI think it is something else, but the outcome should be the same one more high. This up move was the easy part, confusing is what pattern is running.... so many options at the moment.
DeleteHello krasi!
ReplyDeleteSeems like the market wants its 4-5 ... are you still favoring another short term high? In terms of timing, end of february might not be the low, but things are not over yet, has your view changed? Thx and good luck!
Yes, short term another high looks more likely, but I am not convinced any more that it is an impulse 4-5...
ReplyDeleteI do not make deep time analysis. 16 weeks is the average length for 20 week cycle and this is end of February early March. I was expecting 4-5 weeks correction and not a crash.
The options are shorter cycle 12 weeks less likely or wave IV is still running and it will take more time - mid March for a zig-zag, end of March for a triangle.
Looking forward to your analysis or next update krasi, it all seems very confusing at the moment... and this market is toying with the ‘a-b-c of wave B of iv’ crowd :-)
ReplyDeleteDo you see the next short term high by end of next week?
Choppy pullback so no new information. Next week should be up it does not look like a reversal.
DeleteMy favorite pattern is triangle it will fit very good EW/cycles/indicators..... we will see.
So many options , but I like the idea of big flat...providing 2754 stays intact , we drop in b of B to the sub 2600 level , then rally in c of B to test the ath or the 2800 level ...then mini crash to new lows .
ReplyDeleteSimply prefer that option as the mkt seems intent on whipsawing the most people and that would confuse everyone .
According the alternation rule wave 2 and 4 should be different patterns..... I do not know how important this rule is.
DeleteMy favorite pattern is triangle:) What ever it is we should see a few whipsaws.
Thanks Krasi , we'll know soon enough..
ReplyDeleteShort term it looks like the small wave 4 in the first chart finished?
ReplyDeleteI don't think it looks like reversal, but not sure... And it tested the EMA50 low a few times... choppy pullback move?
DeleteThe problem is for example NDX shows pullback/high/pullback/high running, but SPX/DJ are just moving lower in something like bull flag. Neither finished impulse... nor reversal... wave 4 less likely looks like wave of a different degree. It is a mess at the moment.
DeleteNow QQQ looks like impulsive 5 wave in short term? How high do you expect? Thanks.
DeleteYes Nasdaq looks like impulse... not much left iii of 5 is running 170 for QQQ
Delete