Apr 2, 2018

Update

Indexes like NDX/SOX/XBI do not look like an impulse lower they look like double zig-zag which is completing now. If you apply this to SPX you have W-X-Y with Y=0,618xW. The alternate scenario is the impulse which I am following(green), but it needs one more lower low. To be honest the impulse does not look so good and I like double zig-zag more.
Personally I do not wait until the last wave lower for the perfect pattern, often this does not work and I am buying small amounts at the lows building a position.

51 comments:

  1. If the S & P breaks 2532, what then?

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    1. Nothing, it is not 1-2 from the February low which I do not expect anyway.

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  2. If this completes as your analysis is showing, then we begin wave 5?

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    1. This is one option, but I have the suspicion that this could be multi month corrective move.

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  3. So I gather from your analysis that building a long position over the next 1-5 days is a reasonable trade to make now.

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    1. Everyone has different trading style and risk perception.
      Personally I am a buyer because I think the indexes are days away from a bottom.
      On the other side I think there will be one more higher low for an entry. So if some one wants a confirmation and low risk should wait.

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    2. Whats your s and p target for april may

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    3. Something around 2800 and if I am wrong new ATH.

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  4. Early days , but looking choppy & corrective move up so far.

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    1. It looks like impulse from the low, lets see what happens the rest of the day.

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  5. C or iii ....waiting to see what happens if we rally to 2608/9 or if support holds at 2585/6 . Would've hoped tech would be leading , but not so far.

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    1. A lot of overlapping. Either it is over or we will see the final wave lower to finish ED. It is getting interesting in the next few days.

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  6. Looking like new lows . If futures stay hard down , we'll leave a huge gap & those tend to fill pretty quickly . Could be a big drawdown first though- have to manage the risk of seeing another 50-100 handles lower over the next few days before a reversal.

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    1. A lot of overlapping it should be ED which means not much lower than the last low. When I measured the waves one of the targets for the end of the move was 2542 and it looks very good for a low of an ED pattern. It will be interesting wat happens around this level.

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  7. Krasi, rather than your green 4 , is it possible that was a , we had an expanded b wave to the 2553 low on monday and are now in c of 4 ?

    I'm trying to figure out how we rally here , but still have a more normal end to B down, as today just doesn't feel or look like a bottom.

    If so, I'd guess the C wave up could have us near 2700 next week .

    Thanks

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    1. Not very likely, this will be very strange pattern.
      A lot of overlapping I suppose ED. Yes, it does not feel like a bottom.
      I hope to see one final flush lower, it will look very good - finished pattern, everybody shitting their pants and giving up:)
      Come on bears where are you? Smack the market lower:)

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  8. Hard to know , but this rally today with tech leading might have legs if the gap fill doesn't resist.

    Thanks

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    1. I know, I hope at least to see a quick sell off with higher low.
      I have already long positions so it is not so bad, just want to add more:)

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  9. So this is the bottom or another wave down? Thanks.

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    1. Isn't that the million dollar question that we try to find the answer for from Sir Krasi? :-)

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    2. It looks the bottom to me.

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    3. Thanks. I know its engulfing, but another concern is its volume is still low...

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    4. I do not use volume. I do not think it matters much.

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  10. Is there a level you add to position or max it out? ;) just trying to figure out if you a) ride momentum from here or b) continue to buy weakness at this stage. thanks in advance

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    1. I trade usually the pattern not levels. The pattern was looking mature and days away to be finished. This was confirmed from indicators,market breadth and cycles so I was buying every sell off since last week... although I knew the low will be most likely this week:)
      Short term cycles say 2-3 weeks higher. Intermediate term cycles says 40 week cycle low so 2 months higher will not be a surprise.
      So I will buy every corrective move lower in the next 2 weeks and the end of April the next short term cycle high I will see how the pattern looks like. If it is not so strong I will take profits. If it is strong just 20%-30% to secure some profits.

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    2. Thank you Krasi for teaching a man how to fish! :)

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  11. Hi Krasi, I think the low is in and an intermediate term rally should happen now for 1-2 weeks? What do you think?

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    1. Yes, the next short term cycle high is in 2-3 weeks.

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  12. Hi Krasi!
    Your comments yesterday morning made me smile, because you put words on my thoughts, a last puke would have been the cherry on the cake :-) but it’s not as markets behave, always trying to inflict pain. Anyway, glad you’re long, so am I and i hope most people here!
    Now, do you have by any chance any short term level, or is it still the case that we need to see more to know the pattern emerging in the next month. We’ve got daily MA50 at 2717, a level to enter a little short term downside punt? I guess today is really important, if the market does hold yesterday’s gains, we might have that last lower low for ED. Otherwise medium term target of 2830s or new ATH by may?
    Thx and good luck!!
    Dan

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    1. At the moment an impulse is not well visible. If it is an impulse I expect it to make a high around MA200 hourly and MA50 daily around the 2700 area +-10 points.
      Intermediate term I expect around 2800-2820 end of April. I have the suspicion that this is not waves IV/V, but I will think about that in a few weeks. First to see how April develops then we should know if the top is in or to expect new ATH.

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  13. *if the market does NOT hold yesterday’s gains

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  14. Also, a move to around 2694 would still allow for an expanded flat, which would revisit the low seen monday, don’t you think?
    Willem from prognosis might update his promisinng turn days calender tool too :-) expanded flat fits quite well with his predictions.

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    1. I can not see an expanded flat. Turning date does not give you how big the move will be. I see wave 1 in a day or two then w2 so it is not a problem to see a decline with higher low.

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  15. Thanks Krasi for the update. What's the likelihood that we are seeing the 1 of C from the recnt decline ie the ongoing rebound is 2 of C and that spx would not hit 2800 level. Thanks

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    1. If this plays out this will be ii of 3 and not C any more.

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    2. Any reasons why this scenario is less likely to happen as compared to your base case? Thanks

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    3. Because cycles, the indicators and market breadth point rather to intermediate term low than a pause and continuation lower.

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    1. First 2690-2700 then pullback after that 2800 comes.

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  17. Index futures sharply goes down after the market was closed. What does that mean? Thanks.

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  18. I'm sure you all saw the news...this was the next BIG risk, it's a huge threat to everything, and IF the market can brush this off and trade higher tomorrow, we're all cleared for takeoff: https://www.zerohedge.com/news/2018-04-05/futures-tumble-after-trump-orders-ustr-consider-another-100-billion-china-tariffs

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    1. Yesterday I was to lazy to post a chart:) it looks like 1-2-3 higher is running and wave 4 is expected. Currently the markets are where the low of w4 should be. If we see the markets recover we have a confirmation for an impulse. If not we will look for another pattern.

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  19. I hope you're right :) i think futures traders are probably too scared to sell the market too hard at the moment until cash markets open tomorrow because of how badly they got hurt jumping the gun on Wednesday...so tomorrow AM will be key, and we also have jobs #s to consider, but normally trades up on that data no matter what

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  20. Morning Krasi!
    Thx for your answers :-)
    Is the market holds, what is the target for w5? Is that the waves of ii of 3? A chart would have been paradise, but will gladly wait for tomorrow’s update :-) good luck and thx for your work!

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    1. For a reversal we need need confirmation and this is one more high for a finished impulse with target around 2700. So far we have 1-2-3, w4 the futures already down, now we need one more high.

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  21. Tech sector looks weak and the FANG stocks I would say one more low for finished pattern will look better.
    Interesting.... one more low for the FANG/NDX? For the major Indexes too or just deep retracement?

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  22. Real news today will be the payrolls . A strong number there that follows the ADP could see a double whammy . Would still prefer to see a test of the lows , but the pattern is beyond me .I'll leave that to you Krasi!

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    1. I am just guessing too:) but I think I know we are close to intermediate term low.
      I expect the low to be tested too, looking at the weekly histogram I do not think we will see a rocket launch.
      And today I was digging deeper the tech sector(single shares) because it was lagging seriously yesterday a red flag.... to be honest for the FANG stocks we should see a lower low for a finished pattern. This means NDX should make one more lower low and SP500/DJ??? Today will be important day to confirm or negate reversal.

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  23. Payrolls weak but revisions strong . More whipsaw...

    As you say , tech is the tell..

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