Aug 11, 2018

Weekly preview

SP500 touched the upper trend line one more time and pulled back..... at first glance it looks like finished wave c/B and reversal. What bothers me DJ does not look like reversal more like b of B(the yellow scenario). RUT looks like triangle and XBI like a flat so positioning for a short term bottom and not reversal 10%. The indexes are not always in sync, but at important top/bottom they are. The daily cycle looks strong right translated and usually after that higher high follows.
What I want to say is the yellow scenario is alive so if you are short watch closely what happens next week. If we have a reversal it should be strong red week closing around the low for the week. If this does not happen it is more likely that we have b/B... or alternate 1 for ED.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the upper trend line was hit one more time and price turned lower. If wave B is finished price should drop lower whole week and close around the lows for 1/C.

DJ a little bit more clear picture - the pattern looks way too much like impulse and a-b-c. The same pattern shows RSI - it says the top for wave 5 was in July not in August(broken trend line and test of the break)followed by two legs lower.


Intermediate term - the indicators with divergences so something lower is coming... watch the price behavior next week.
Alternate scenario if the bears disappoint - one more high for the yellow scenario and more likely something else 1 of ED than B... it will take too long for B.


Long term - the indexes are nearing an intermediate term top and decline until October should follow for 18 month cycle low. I do not think we have major top... and the bottom for wave 4 is still not 100% clear.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same.... weakness and divergences. After 6 weeks 170 points rally most indicators can not move into overbought territory and some of them with divergences.
McClellan Oscillator - below zero.
McClellan Summation Index - lower high and divergence.
Weekly Stochastic of the Summation Index - in overbought territory,but no reversal.
Bullish Percentage - made a new high, but below 70.
Percent of Stocks above MA50 - lower highs below 75.
Fear Indicator VIX - a lot of complacency and sharp reversal.
Advance-Decline Issues - lower high, but still holding around the middle of the range.


HURST CYCLES
Day 30 for the 40 day cycle.... the cycle is strong right translated the odds favor another higher high.


Week 6 for the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 12 for a countdown, one more high is needed for the countdown to be finished.
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23 comments:

  1. AnonymousAug 11, 2018, 4:44:00 PM

    Hi Krasi. Thanks for the update. What are the chances that DXY will be strenthening into end of the decade? Thanks

    ReplyDelete
    Replies
    1. KrasiAug 11, 2018, 5:47:00 PM

      The chances are very high. Currently we have impulse higher now multi month correction should follow and another leg higher. At least until the end of 2019 the USD strength should continue and the cycles point to an important high in 2020.

      Delete
    2. AnonymousAug 12, 2018, 3:08:00 AM

      Hi Krasi, cycles studies have been a key element you analysis. Do you mind to share a little bit more on how should one including me can begin with this area of analysis? I tried google this topic many times but still can really get a gist of it. Thank. KT Wong

      Delete
    3. KrasiAug 13, 2018, 9:16:00 AM

      This is a very long story. There is many authors which wrote about different cycles - economical,solar,climate,Hurst,Gann,Benner,Puetz etc.
      This book is a good start to get the idea "Mastering Hurst Cycle analysis - Christopher Grafton" You can download it in Internet.

      Applying them for trading is again completely different story.
      - David Hickson wrote software which draws Hurst cycles(Sentient trader is not free) and he posts videos https://www.youtube.com/user/SentientTraderVideo/videos. He has a system based on FLD to trade.
      - Other guys used the Hurst's book to develop bandpass filter to calculate the phases of different cycles... very good results, but they do not give it of course:) If you an engineer you can try it:) - http://forum.hurstcycles.com/t/using-hurst-bandpass-filters/591
      - more simple approach with good results - above MA10 and the cycle trend line the daily cycle is up, below them and it is down. Good for a trading system. You can follow him for a while to understand the
      idea - https://likesmoneycycletrading.wordpress.com/
      - my approach is very simplistic - I am watching for important tops/bottoms 20 week cycle or longer and combine it with EW and TA for confirmation. This way you have a trade with high probability.... and cycles give you time frame, EW gives you only a pattern.
      Different assets have different rhythm, but the idea is the same. USD,US Indexes,PM have nice running cycles, Oil/NG are awful.
      My problem with indexes so far was that the amplitude disappears(price just melting up) and I do not know where to put the low for the 20 week cycle. I found indicator which can do the job and is not so dependent on price.
      With this you can track the daily cycles when it drops to -10-20 the longer cycle is still running, when it drops to -45-50 it is intermediate cycle low - https://stockcharts.com/h-sc/ui?s=%21MCOSIRSPX&p=D&yr=1&mn=6&dy=0&id=p72875965083
      With this the 20 week cycle - https://stockcharts.com/h-sc/ui?s=%21MCOSIRSPX&p=D&yr=2&mn=6&dy=0&id=p49263955695

      Delete
    4. AnonymousAug 13, 2018, 3:54:00 PM

      Thanks Krasi...defintely a tough nut to crack. Just have to dig it up! KT Wong

      Delete
  2. AnonymousAug 11, 2018, 10:51:00 PM

    Hi Krasi,

    From the vol point of view, looks like vol/VIX traders are already preparing for a vol spike within few weeks as the value of vol reached a short term bottom and resembles the pre-spike setup we have seen before VVIX (implied volatility of S&P500 volatility = volatility of VIX)
    https://ibb.co/jBER39

    Best Regards,

    Mily

    ReplyDelete
    Replies
    1. AnonymousAug 11, 2018, 10:56:00 PM

      Forgot about Bollinger Bands:
      https://ibb.co/bK8awU

      Delete
    2. KrasiAug 12, 2018, 6:47:00 AM

      Yes, spike is coming.... if not next week 2-3 weeks later.

      Delete
  3. KrisAug 15, 2018, 7:11:00 PM

    Hi Kradi.. do you think Spy follows your red line down? 1 of C?
    Thanks

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    Replies
    1. KrasiAug 15, 2018, 7:35:00 PM

      Only if the move continue lower and we see bearish weekly candle.

      Delete
    2. KrasiAug 15, 2018, 9:46:00 PM

      So far this is not the case. Reversal and down trend should print bearish weekly candles - bounce at the beginning of the week and lower. We see the opposite lower three days and intraday reversal. Bounce for another day and we will have a candle with long shadow.
      I am talking all the time about b of B we will know soon if I am right.

      Delete
  4. AnonymousAug 15, 2018, 8:28:00 PM

    How about gold miner and gold? Can we say bottom? parabolic down... Thanks.

    ReplyDelete
    Replies
    1. KrasiAug 16, 2018, 6:03:00 AM

      I can not say today is the the bottom, but yes USD is making intermediate term top and PM/miners a low.

      Delete
  5. SergioAug 16, 2018, 9:27:00 AM

    S&p dont start the C wave... Warning!!!

    Other short term high or and start C wave or not is B wave???

    ReplyDelete
    Replies
    1. KrasiAug 16, 2018, 2:50:00 PM

      I have explained this weekend that something is not right and we will have a confirmed reversal only if we see a bearish week closing around the low for the week. So far the price behavior is not confirming it.
      The indexes is doing the opposite - instead of pause for a day or two and plunge for bearish weekly candle we have lower for three days with intraday reversal and this will produce bullish candle.
      The signs do not look good for the bearish case so far. It looks like pullback and 40 day cycle low and not like a reversal.

      Delete
  6. KrisAug 16, 2018, 12:40:00 PM

    You are right...it looks like we hit short term bottom and rebounding now.

    ReplyDelete
  7. AnonymousAug 17, 2018, 4:55:00 PM

    A-B-C up to 2850 yesterday . Today looks rangebound , so early next week will give us a break lower below 2802 or new highs above 2850.

    Interesting to see which way you think we head Krasi....Europe leading & saying lower?

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    Replies
    1. KrasiAug 17, 2018, 7:24:00 PM

      Nothing convincing neither lower nor higher... coupled with weak market breadth for a month favors consolidation and one more high. Europe is weak and the message is not to expect strong rally just higher high.

      Delete
  8. KrisAug 17, 2018, 8:34:00 PM

    Considering s&p makes a new high it should follow your second scenario, the yellow line.. what, in this case, is your prediction for the low in 2ED? Thanks Krasi
    Kris

    ReplyDelete
  9. DevAug 20, 2018, 1:23:00 PM

    Hi Krasi, Please tell me about USRINR and Nifty? I am short at USD from 68.90 and it is 69.90 right now, facing huge loss. please help me out. Thank you so much!

    ReplyDelete
  10. DevAug 21, 2018, 12:43:00 PM

    Hi Krasi. Waiting for your reply.

    ReplyDelete
  11. wealthbuildupAug 24, 2018, 11:17:00 AM

    All of your blogs are up to date, i appreciate your work. Keep going and update us with your latest and fresh blogs.
    Share market calls
    equity tips
    Commodity tips

    ReplyDelete

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