Intermediate term view - the price action looks like a triangle to me, waiting for the low of wave 4 from Feb.2016 bottom.
We had the corrective leg lower as expected, but it is developing too fast which raises the odds for a bullish triangle. With another corrective leg this week the odds that we have a triangle are even higher and it is difficult to see other decent pattern. The challenge now is to find the bottom of the triangle. The price action from Friday raises the odds for wave 4/5 and impulse from the last low, which means the white triangle(see below). We can only wait and see what happens on Monday. No need to make a decision.
Alternate options are bearish triangle and bearish 1-2 i-ii.... not really favorable at the moment. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two variations of a triangle.... at the moment the white one is slightly more favorable because of potential wave 4 from Friday.
Intermediate term - waiting for a finished triangle and the final wave V. The price is still trapped between MA50 and MA200 and we have indecision. I think we will see a bullish outcome and steep rally - thrust from a triangle because of short covering.
Long term - expecting one final rally. The histogram comparison continue to work. We have sideway price action for 5 weeks and now only the final piece is missing sell off and weekly reversal with bullish candle.
MARKET BREADTH INDICATORS
Market Breadth Indicators - slightly positive... nothing interesting, I suppose we will see higher lows when the triangle is finished and we have intermediate term low.
McClellan Oscillator - at the zero line.
McClellan Summation Index - neutral.
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 - hovering around 15.
Advance-Decline Issues - in the middle of the range, lower high, one more sell off and test of the oversold level will look good.
HURST CYCLES
Day 19 of the 40 day cycle. Most likely we saw mid cycle low and bounce from it. I can not say if the cycle will make higher or lower high.
Week 11 and heading for 40 week cycle low with the low for wave E of the triangle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 6 of a buy setup.... just 0,3 points shy to be negated. Most likely this will happen on Monday unless we see 40 points drop. The bears are not convincing either... normal for a triangle.
Hi Krasi,
ReplyDeletewhat's your view on EURUSD and precious metals?
EURSUD made already an important top and multi month move lower is running.
DeleteThis sideway move is taking too long and I do not think we will see another high.
On the other side there is no strong impulsive action.... probably diagonal or what ever it is and the strong move lower will come later in the summer with wave c or 3.
Precious metals mirror picture - in a few weeks we should see 20 week cycle low then higher for several weeks and sometimes in July they should turn lower again.
It looks like an impulse up to start the week, does this change your two scenarios? Should we be looking for a reversal off the 2680 level for confirmation that move lower is still the most likely path? As always, thank you for analysis.
ReplyDeleteThis was the potential fifth wave and the proffered white triangle so no change.
DeleteNow waiting to see corrective move to confirm it or not.
It seems short term should be fifth wave up tomorrow? Thanks. What's the up move target do you think?
DeleteI do not see fifth wave tomorrow. If we have an impulse at all the fifth wave was on Monday.
DeleteHi krasi! So, the market has reach your downside target for the white line/impulse higher from last Friday.... does that mean it is decision time and if we go any lower then it’s more likely we’re going for a low for wave iv as in the yellow line/E? Are you still favouring the white line after yesterday reversal? A low below 2585 this week would be great, but is it likely? Tempted to buy here, but it feels acting on fear.... thx and good luck!
ReplyDeleteSo far another a-b-c lower. Too many whipsaws, no clear pattern, no edge for trading.
DeleteWe can easily see 4 and 5 for impulse....
I do not favor anything at the moment... too many options. We can easily see bigger a-b-c to 2580.
Kind of getting lost. What wave are we now? It looks like continuing down but vix is quite low...
ReplyDeleteNormal triangle, whipsaws, corrective moves.
DeleteI do not know either how the outcome will look like, but the important message is corrective waves.
So just waiting to see finished pattern and that is all.
Are we potentially a few days from a tradable bottom? the breadth readings aren't quite oversold enough today.
ReplyDeleteI do not know I do not see finished pattern.
DeleteDOW goes down so much while nasdaq still hanging up... And vix doesn't really impulsive up. What does this mean? Thank you.
ReplyDeleteIt means not to trust the move lower.
DeleteIt looks like we have the bottom now... the market has just rebounded.
ReplyDeleteI think the rebound was to close the gap from last week. There is still one gap left at around SPY@260 from 6th of April, it would be nice to see it closed, which would also translate to one small leg lower to finish the triangle (E with a-b-c) and rebound with bullish weekly candle
DeleteRegards,
Mily
So many whipsaws....
DeleteIt looked like the signal line crossing to the positive on the 15 min chart is what triggered the rebound. We will also have another hammer today.
DeleteWe're getting closer to breakout, BB are narrowing, approaching from bottom band which usually indicates higher probability of breakout upwards. I was hoping we touch bottom band and close the gap from 6th April, we'l hopefully find where the market wants to go over next two weeks, so good luck to everyone
DeleteRegards,
Mily
We are gonna rip up in wave 3 again boys
DeleteThere is no third waves only corrective waves.
DeleteThe market will first sell off to scare all the "wave 3 enthusiast" then it will reverse.
That is the way it works.
No my friend. We going to rock tomorrow and force a huge short covering. We will breakout.
DeleteSure like the last time:) On which time frame 10 min? For how long - two days? before the next sell off comes?
DeleteIf you look two days ahead I trade weeks or longer and third wave is fantasy.
So are we in white line or yellow line from the above first chart? Thanks.
DeleteYellow looks more likely at the moment.
DeleteI think so too. But VIX seems not ready at the moment?
DeleteWhen we see sell off than watch the VIX. At the moment we do not even know if it has begun or not.
DeleteResistance at the hourly sma50, up to the daily ....
ReplyDeleteKrasi, is it possible that your yellow D is correct (not the white), but wave E is a triangle of lesser degree? In that case, it would mean that E ended tonight? Or am I counting it wrong? I understand it would make more sense if the whole correction ends with a panic selloff, but ending triangle seems like a possible wave count.
ReplyDeleteI can not see finished pattern.
DeleteYour most recent chart shows the yellow line bottom to be today or maybe Friday. With the weaknesses at the opening today, should we be starting to establish long positions now? Or is there something still missing in the pattern? I know that actual trading decisions are based on individual risk tolerance, but as a student of the market is this a buying range now?
ReplyDeleteI do not see finished pattern, everything is pointing lower so I do not see a reason to buy.
DeleteAnother zig-zag lower with the same size points to 2580. Then it will start look like wave E of a triangle. With this two conditions satisfied you can justify the risk.... now is just nothing.
My breadth indicators are 1-3 days away from being oversold.
ReplyDeleteYes, another few days to see the indicators drop lower and the daily histogram to form a trough will look much better.
DeleteIt is getting interesting DJ and NYSE already with a double zig-zag lower and two legs with the same size. Potential finished wave E?
ReplyDeleteI think we will see heavy selling into the close as we won't have any info about the US/China trade talks until tomorrow's open. I think that 2580 level is still in play today based on the uncertainty of the news tomorrow. I've reduced my short positions but will hold onto a portion as we go into the close per my theory. All my shorts will be closed today as positive trade talk results would likely result in a large move to the upside. This would fit your scenario very nicely.
DeleteAbove 2612 and I'd be inclined to agree Krasi .
ReplyDeleteHopefully a tank into the close tonight would give us a decent entry , but close either way
Krasi what is your Target on SPX
ReplyDeleteBearish case around the highs from Feb/March 2780.
DeleteBullish case new highs above 2900.
What is your time frame for 2780 on SPX and thank you very much for your quick answers
DeleteMid June at the moment.
DeleteIf you count weeks between tops/bottoms usually there are 20 weeks +-2/3 weeks between intermediate term lows/highs.
We saw such a low in February now it is a turn for a high and 20 weeks are mid June.
Hi Krasi... when you say that in bearish case you expect snp to reach 2780 do you have in mind truncated fifth wave? According to EW and the fact that we are almost done with this wave 4 the highest probability should be that the market exceeds the recent high.. shouldn’t it?
DeleteThanks
Kris
Triangle is one option. It is possible that the top is in and some corrective a-b-c since the Feb low is running. The problem I have is that this cycle behaves like a bearish one - 14 weeks or 2/3 of the cycle and still testing the Feb lows.
DeleteThe cycle guys already count lower high and I understand them why.
It looks like the bottom is there already...it fits Krasi’s first chart yellow line perfectly.
ReplyDeleteKris
So last gap from 6th April closed and BB band touched as anticipated, let's see what's next, I guess "wave 3 enthusiast" were shaken out, it's time to shake out "triangle fans" :)
ReplyDeleteRegards,
Mily
May should be positive. We will see how strong the bulls are.
DeleteSo far the bears tried three times to push below ma200 unsuccessfully.
Now it is bull's turn to show what they can.... but time is thinking away the next high comes in June
Tomorrow's NFP, whatever the number is going to be it will be perfect "reason" to confirm today's bullish candle with face-ripping rally, they'll just make up explanation afterwards, but as they say... поживём – увидим :]
DeleteRegards,
Mily
Confirmation is likely to happen, let's wait for the close, and seems like i-ii of 1 are behind us so next stop is probably 2680. Nice sunshine here in the UK just in time for long weekend so I wish everyone to relax and enjoy the weather.
DeleteRegards,
Mily
Do you think this is the bottom? Thanks. Or maybe another wave of up and down.... QQQ is quite bullish...
ReplyDeleteThis should be a bottom. I see already finished impulse to the upside.
DeleteBy my reckoning , this rally should finish in the 2655-60 area . Can see the impulse , but can equally see a three wave move off 2595, so not written off more chop next week - or a retest .
ReplyDeleteThanks for the input this week Krasi
Es it is possible to see another zig-zag, but should move above the last high 2720.
DeleteNow dxy should go down for correction for GOLD should move up? Thanks. Do you expect the following move of SPX should be impulsive move or still corrective move one day up and one day down...
ReplyDeleteUSD and Gold do not look finished one more up and down.
DeleteFor SPX I can not say, but even if it is corrective should move up another 100 points.