Intermediate term view - it takes too long I do not expect wave c of 4 lower. At the moment I think the top is in and we are seeing multi month wave 2/B to test the top (see the charts from 2000/2015).
The major indexes SPX/DJI/NYSE did not show signs of strength this week so ED looks now unlikely for the major indexes. Short term it is a mess SPX squeezed higher high but with a-b-c move, DJI looks like triangle only XBI,RUT continue to follow the plan w2 of ED, but one more low is needed for confirmation. Intermediate term I expect move lower with higher low then up.I think the top is behind us and wave 2/B is running alternate the coming low will be 2 of V. The next bigger move will be lower all indexes are showing corrective structure and the NDX strength can not cover it up. The obvious pattern is wave C lower to finish zig-zag for wave 4. I have some problems with that: - everybody watching the same pattern lower lows - the market does not do what everybody is expecting. - it takes way too long and we have right translated 40 day cycle, which is bullish expect higher low and the next 40 day cycle with higher high. - you have to squeeze NDX in expanded flat - fear does not work this way. Bull markets lead to too much greed and sharp corrections follow either wave A or C is the panic wave you do not panic twice. With expanded flat the coming wave C should be even bigger and scarier. Panic sell off twice in the same pattern within a few weeks is very unlikely. So on this scale 10%+ correction the pattern does not make sense. - on the other hand NDX made a higher high with three waves which means this is not the top. What I want to say - expect a higher low and another move up to test the high. With higher low the options are wave 2 of V or the top is in and this is wave 2 or B of a bigger pattern lower. The strong index NDX - it does not look so strong when you look at the weekly and daily indicators and I think NDX will not pull up the other indexes higher. So the scenario which I follow is ED for NDX and for SPX,DJI,NYSE wave 2/B(see the charts from 2000/2015) and keep an eye on possible 2 of V if I am wrong. The problem with the bullish scenario is w1 is too big wave 3 should rally 20% for 2-3 months. Another parabola in a few months with a panic in between is less likely. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I can not say if the first wave higher is finished or not, but the next bigger move should be lower. One option is wave B flat is already running, the other option is one more high for a diagonal. After that I expect 61,8% Fibo retracement to the support zone.
Intermediate term - preferred scenario 2/B(red). I see similar pattern like 2000/2015 multi month corrective move up to test the high.
Alternate wave 2 of V(green).
Long term - I think it is more likely that the move from Feb.2016 is over and the last rally will make lower high.
MARKET BREADTH INDICATORS
Market Breadth Indicators - look positive pointing up. Not very strong, but not bearish either.
McClellan Oscillator - above zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - bounced up from the 13 level. The normal lows are 13-14 not 9-10 so not a surprise.
Advance-Decline Issues - lower high with a divergence.
HURST CYCLES
Day 24 of the 40 day cycle. For me this move up takes way too long. I expect right translated cycle and another higher high for the next daily cycle.
Week 5.... as I said it takes too long and I think a new 20 week cycle is running.
How this 2/B wave looked like in 2000 and 2015. So far the pattern looks similar. In 2000 NDX made higher and SPX/DJI lower high. Some are saying when NDX makes higher high SPX should follow. I would say - why not non confirmation? The major indexes sending a warning that the trends ends?
Hello Krasi! thx for your update.... it seems the market goes for the good old wave B... so unless it reverses today and closes back in the green, next stop would be a higher low?
ReplyDeletethx!
Yes, I think B from the first chart is running. Now waiting to see how exactly it will look like. More to go for an impulse.
DeleteToday it seems the down move is finished... then what's the possible pattern? flat? triangle? Thanks.
DeleteNothing new, too many patterns are possible. Finished on the small time frames not on daily.
Deletehi krasi, has gold miners finished basing pattern?
ReplyDeleteIt looks to me like consolidation before moving lower.
DeleteDo you think this down turn is over?
ReplyDeleteThis c wave down should not have a rise this long right?
More likely that it is not over. Rise too long.... a few points in a few hours I am not sure what you mean.
DeleteI guess with c wave down i expect plummeting lower. I
ReplyDeleteThis is what most traders expect and I have explained why it is unlikely to happen.
DeleteSo far the price action confirms it.
But it plunged yesterday. Isn’t that what the traders expected?
DeleteMost analysis I see expect much lower for example Nasdaq with expanded flat and lower low.
DeleteYesterday the bottom has been bought we did not see a close near to the low for the day and today is nothing so there is no continuation.
So now most people may expect the market should go up. Isn’t it that the market does the opposite and falls?
DeleteI do not know how you measure that most people expect the markets to go up. I do not have such observations. Short term yes record ETF inflows and promptly reversal.
DeleteKrasi, I hope that this doesn't become a chore for you...writing, updating charts, posting, answering people's questions. I like what you do and realize that you are just doing it for free. If it makes any difference, I would not mind if you keep your charts down to about 3 per week - I like the short, intermediate, and long-term projections. You could even omit the long-term one and focus just on the short and intermediate term for swing traders. Maybe the 3rd chart could be gold or gold miners since people seem to ask about it. Keep up the good work but make sure that this doesn't become a big hassle for you.
ReplyDeleteOne or five charts does not make any difference. Analyzing two markets with two charts costs twice as much time than analyzing one markets with 5 or 10 charts. The time consuming part is to take time and look what exactly is going on - pattern, indicators, time component etc. uploading is the easy part:)
DeleteShort term analysis do not work so gut I am focusing more on longer time frames.
I thought many times about posting other markets too, but I really do not have the time.... and in two months I will have even less time. It will happen one day, but I do not know when... it will not be in the next few years.
Hello Krasi!
ReplyDeleteif we follow the 2015 textbook, do you think we are still in the recovery phase/A or rather on our way to retest the feb lows/B ? seems like the million dollar question, but are you still inclined to favour a upside move this week to finish A? thx!!
This should be wave B or X or 2 or what ever it is. This week up is only retracement as part of this corrective wave lower.
DeleteIs this corrective move lower finished? Is there another short term wave 5 so that SPX reaches 2650? Thanks. Now it looks like already reversal and move up...
DeleteCorrective waves up and down. I do not think it is finished.
DeleteThanks for the update. Now it seems hard to say up or down? Both very long upper and lower shadow...Is there potential pattern? Thanks. Gold/Gold miners seems blow up?, is this the final move up and begin its down move?
DeleteUp for a few days then down again. Too many potential patterns it is in range for 6 weeks.
DeletePatience just wait for the move lower to play out.
Looking at JPY there is one more move up for Gold. Most likely it has begun.
Finally we got the down move, is it finished today or another testing to 2650? Thanks.
ReplyDeleteIt does not look finished. One more time up and down.... lower low with divergences.
DeleteHi Krasi,
DeleteYou must be really tired. So it is likely that the primary scenario now is expanded flat for 2 of V. Didn't have time to write it yesterday but VIX/VXX were pointing at S&p moving lower. I closed all VIX/UVXY calls today with profit and waiting for reversal signature to start building long SPY / short VXX position. Looks like it is gonna be crazy a friday :] Keep it up Krasi. BTW, thanks for the RSI trendlines tip, my eyes are wide open now.
Regards,
Mily
A little bit tired to repeat every day that the move lower is not over:) The guys are focusing too much on day to day price action and lower time frames and forget the big picture.
DeleteIf it is 2 of V or some B/X wave is not 100% clear, but we know when it is up and when down so no problem... with options you should care even less:)
RSI trend lines work so great I do not know why so few use them.
Beautiful call on non-confirmation/being patient Krasi...given the weak closing price, it looks to me like we 'could' make a slightly lower low based on my analysis. we'll see.
ReplyDeleteI suspect lower low with intraday reversal, then bottoming for a week... test of the low usually with lower low and divergences.
DeleteAgree on intraday reversal...on the lookout 😁
Deletei will just point out though: the trend line using the weekly candle lows for the ES futures from Feb2016, intersects perfectly with a 38.2% retracement (perfect wave 4) from the Feb2016 lows to Feb2018 highs...just throwing it out there.
ReplyDeleteKrasi,
ReplyDeleteJust here to say thank you. Your analysis has taught me a lot and has really changed the way I view markets. I've followed you for a couple years now and you aren't always spot on, but gosh darn, you're good. You influence my trade setups heavily and I appreciate the work you do.
-CT
Hi Krasi! Would you mind explaining the ‘lower low with intraday reversal’ (is it lower low of early march or lower low of early february?), and bottoming out for a week after a reversal meaning there is no real follow up of the reversal for a week? Thx a lot for your patience and work !!! Jd
ReplyDeleteLower than yesterday then possible intraday reversal and higher 1-3 days and another lower low, but higher than the the February low.
DeleteThanks Krasi, I was about to ask the same question. I am watching EMA200 trend line, trend line from Feb2016 and RSI and hopefully with that, I will be able to identify the bottoming. Thanks for sharing your knowledge!
DeleteYes Krasi is as good as they come. He may not get every move right but his consistent and logical views makes for consistent profits over long haul.
ReplyDeleteI do appreciate his insights.
Now it seems some are saying we are in leg 3. Especially bob. But we all know such prophecies rarely materialize.
Would you set a target range for the lower low? Thanks!
ReplyDeleteIt is too early no confirmation for finished w3 and w4 has not even begun.
DeleteIf we assume w3 is over and w4 retrace 38% the are is 2550-2580.
Now the down move looks like big C wave... Any potential target or pattern? Thanks.
ReplyDeleteIt is too early wave 4 is still missing. With standard Fibo measurements somewhere between 2550-2580.
DeleteHi Krasi
ReplyDeletePlease correct me if I am wrong but the indexes are showing the following development of this correction: the S&p500 the typical textbook zigzag with expected lower low. The wave A had 5 waves, B 3 waves and C should be 5 waves...now I think #3 is running. Dow has the same pattern and Nasdaq is showing expanded flat and should only test the low. Do you agree?
Thanks
Kris
NDX/RUT/XBI I still think they look better as ED.
DeleteFor the other indexes I think this is the bottom of w3 and we will see 4 and 5 before it is over.
SPX higher high in March with 3 waves is it a-b-c from the February low and now C? or expanded flat for B? You can not say how long w5 will be if it will make lower low or not.
DJ/NYSE with lower high in March so why not a-b-c from the high? if it is C of V they should continue much lower and this is just iii of 3.
Only theory I care less about labels. EW and the indicators say one more up and down that is all. Other indexes suggest intermediate term low coming so I do not believe in the most bearish options and waiting to start building long position.
Also, in addition to what Kraise said, have you noticed option guys are not that thrilled? VIX is a measure of implied volatility, and not spiking crazily like in Feb, actually I would say bullish divergence S&P/VIX is building. Unless of course W pattern on VIX/VXX plays out and we have a spike > 30. Anyway, I hope it ends up as re-test of feb bottom and we go up again (have a plan to short financials with FAZ, all the way to bottom, and if it is over now, I had missed the train :)
DeleteRegards,
Mily
Couple more thoughts
Delete- This correction is starting to look more like June/Jul/Aug 2007 (look at monthly candles & RSI)
- I think W pattern + bull flag on VIX/VXX might actually play out, Looking at VXX weekly, A-B-C up is running, and I would expect to see higher high with divergence on weekly. Next week or two should be very interesting, especially 40 cycle low is approaching :)
Enjoy your weekend Krasi, you need to take a rest as I'm sure all novice traders will keep on asking questions next week :)
Bets Regards,
Mily