Short term - I wrote that one more lower low is possible with oversized ED.... it though this has lower probability - well it happened.
Now the move higher looks like impulse, which confirms the reversal. I am not sure if this high is 3 or 5... with one more high we will have impulse with better FIbo measurements, testing MA200(hourly and daily), testing the RSI trend lines (daily chart), indexes like RUT and DAX need one more high for impulse, if you look at previous correction we have roughly 2 weeks higher and 2 weeks lower to test the low 3-4 days higher is too short.
I want to say that one more move higher next week Tuesday/Wednesday will look much better.
Intermediate term - it is official we have overlapping and the move lower is only corrective a-b-c. With this final low on Monday the Fibonacci measurements look perfect with a=c(for C) and A=C and for the trend line the shadows are included. The price is nearing resistance and MA200, the low should be tested and the gap closed, but this will be a buying opportunity.
The bulls see 3000 at the end of the year, but I think the index will spent the rest of the year between support/resistance zone for a-b-c->X or 1-2 i-ii.
Long term - the histogram with huge trough like 2011/2015/Jan.2018 it will take months to reset, RSI confirming a-b-c. We have an intermediate term low which will last for months. Now waiting to see how the move up will look like to confirm one of the two scenarios.
MARKET BREADTH INDICATORS
Market Breadth Indicators - most of the indicators are turning up after divergences. It will take time, I do not see V shape recovery.
McClellan Oscillator - above zero after triple divergence.
McClellan Summation Index - turned up from extremely oversold level.
Weekly Stochastic of the Summation Index - trying to turn up from oversold level.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - turned up and trying to move above 25 level.
Fear Indicator VIX - moving lower after a divergence.
Advance-Decline Issues - moving higher after a divergence.
HURST CYCLES
40 day cycle was finished which is not a big surprise, now day 4 of the next 40 day cycle is running.
Week 1 of the next 20 week cycle. I think we have 18 month cycle low.
I must say I feel we have more downside. Bonds are spiking, and we had a double top without any real fear yet. I think if we have a quick rally over the next few days to reach the 2856 target we can say that is a B or 2nd wave because of how quick it was reached (bear rally) and it may be a good short entry.
ReplyDeleteHowever if we do consolidate in this area over the next few weeks I agree with your assessment.
Look at my previous post. The correction begun in January and lasted 10 months with market breadth and indicators comparable only with 2011 and 1015 - the two biggest corrections since 2009.
DeleteClaiming the correction needs more to the downside because it is too short or there is no fear(how did you come with that at all??) are plain wrong.
I think what happened in January is something different, this correction that started in October is a higher degree correction while the one in January was one degree lower and most likely was a triangle. The current correction is likely a major 4th wave, so we are likely to see a .382 retracement from 2011.
DeleteAlso, if we have a strong impulse after this current down move is done, then we are most likely in a 3rd wave and in an uptrend and the larger correction is over.
ReplyDeleteHi, Krasi, can you update the current SPX？ it seems not bullish as we want but not bearish as other ways... So what's the direction
ReplyDeleteNothing new to add "one more move higher next week Tuesday/Wednesday".
DeleteMaybe I am misreading your recent short-term chart, but it looks to me like the chart says a top today. The bottom axis has the number "12" and the peak is drawn before it. Anyways, I missed buying this bottom and did the opposite and sold most of the way down expecting a more immediate retest. So I am in that lousy mental state of wanting the market to go down.
DeleteIf this will make you feel better I think we should see 50% retracement.
DeleteMany did not believe it at the top and many did not believe it at the bottom.... it is normal.
Statistic says the first pop up lasts roughly 2 weeks and we saw exactly this. With such very oversold indicators it is not a surprise that the snap back is so violent.
Thanks Krasi .
ReplyDeletePossible pop n drop today and I think your retracement below 2700 could be over in a few days. Looking at 2786 today for an entry...
It should take longer to the down side. Looking at previous occasions the first pop up is roughly two weeks(check) and the next move lower 2 weeks.
DeleteKrasi, are you still expecting a pullback to 2700 or lower on this move before the move higher? thank you for your work
ReplyDeleteIf you get a higher low the pattern will give us an inverse H&S and 2700 would make a pretty nice shoulder. A less hawkish remark from the Fed today could push us beyond the 2820 level, but I would like to see a successful test of 2820 as support before going long. The blackout period for these companies reporting earning will be over soon and that has sapped the volatility and been positive in the last few quarters. Big selloffs this year have been occurring around blackout periods with stabilization coming after.
DeleteYes, 50% retracement and test of the first gap will look great.
DeleteAs CTHuey wrote inverse H&S
Is the retracement running? Thanks.
ReplyDeleteI think so, small up and down on the short term charts still needed to confirm impulse and more to the downside to be 100% sure.
DeleteClosing the first gap for iv and then one more high would look better to me in 2830 to 2860 area for v. Then we close the 2nd gap.
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