Jun 14, 2019

Short update

In the next three weeks I am on the move so the next weekly update will be on 7-th of July, in July I will post the long term update too.


Only short update... in fact nothing happened this week - slightly higher to finish the first wave up, now we should see some kind of b wave. Again as I wrote June should be up, after that we should see the indexes turning lower.

Jun 9, 2019

Weekly preview

One more decline on Monday to touch the neckline and 38% retracement followed by sharp reversal... as I wrote why should someone short a bottom?
I hope now the non-believers understand what I meant with go long or at least take your profits. If the market wants to make a higher high ride it, if it makes lower high short it again at much higher levels - simple trading plan, low risk, no emotions.

After this vertical move the only pattern which makes sense is that we saw the top in May and the decline begun with a zig-zag... this is a bad news because the pattern to the downside will be difficult to predict and trade.
What is the alternative - if you count this week as the start of an impulse it will be finished in the 3150-3200 area. This is not c/B anymore it will be i/3. I do not see evidence to support such pattern.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two impulses higher with the same size which is corrective and support my view - expecting lower high. The only way to count this an impulse is extended fifth wave - I doubt it.
Do not count it automatically as w1 because of strength. In Feb and late Oct 2018 we saw explosive moves up too, which ended with another decline (see the daily chart).


Intermediate term - I have tried to explain with simple TA why this is a low... many did not want to hear, but it is playing out as expected. History(rectangles) says we should see 3-4 week higher even if the pattern is bearish. The main pattern which I follow for weeks is that we have reversal with a zig-zag(yellow) which means complex pattern to the downside.
The trend line could be tested now only with ending diagonal to burn time June/July.... it is too early to predict such pattern.
The green pattern for impulse higher points to much higher levels and does not make sense any more.


Long term - one more leg lower to finish wave IV from 2009. Expect complex pattern because of time and so far we have only corrective zig-zag lower.


MARKET BREADTH INDICATORS
Market Breadth Indicators - are turning up. Advance-Decline Issues never moved to oversold levels, which is unusual... the indicator says we are still in the middle of a move lower which corresponds to the main EW count a-b-c lower.
McClellan Oscillator - above zero.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - trying to turn up.
Bullish Percentage - turning up.
Percent of Stocks above MA50 - turning up .
Fear Indicator VIX - I want ot see another low in the 13-14 before the next explosion higher.
Advance-Decline Issues - in the middle of the range. It does not give a sign that the move lower is finished - no oversold levels hit. It looks like the bearish EW count zig-zag lower now retracement and final decline to oversold levels.


HURST CYCLES
For bullish right translated 20 week cycle I wanted to see shallow decline for 2-3 weeks. It was much bigger and longer and coupled with probable 40 week cycle high in May(discussed many times) the odds are higher that the next 20 week cycle will make lower high.

Day 4, it looks like the next daily cycle is running.


Week 1... possible 20 week cycle low at week 23.

Jun 1, 2019

Weekly preview

Lower but no acceleration as expected. What happened this week - the patten is slowly taking shape and it looks like zig-zag, the monthly candle looks very bad - big red reversal candle... constant selling from day one until the end of the month.

The same thoughts - we need to see the indicators/market breadth reset first before continuation lower. What to do with this zig-zag?
- bearish we have reversal - the final wave lower(for wave IV weekly) should play out as a big zig-zag and the first wave itself is a zig-zag.
- bullish - zig-zag is corrective structure and the door is still open for another leg higher. In this case I would count it as b/B with another rally to 3040 for c/B and big expanded flat. With many shares which already reversed and this ugly monthly candle the odds are low, but who knows.

I will watch closely for a long entry next week. If we see the price 300 points higher great, if it is weak and we see only 100 points higher I can live with that:) This is simple trading plan with low risk.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two legs lower with the same size or zig-zag which should be finished soon.... after that the target should be at least the resistance zone is 2860-2890.
The bearish count is 1-2 i-ii I am not big fan of this counts, never worked since 2009 it was always just that simple zig-zag.


Intermediate term - indicator which measures acceleration is the histogram. Examples of acceleration are the red arrows - the price just moves lower(or look what happens with crude oil). Currently we are seeing second higher trough with divergence which is the opposite of acceleration - it is slowing down. The price/indicator behavior is exactly the same like October 2018. The same setup has the DAX twice in 2018. In all three occasions the outcome is the same - the indicator has to reset(price higher) before continuation lower. I do not think this time will be different.

On the chart are shown the two options - bullish and bearish.
Bearish - if we see weak bounce for a few weeks unable to break above MA50 and resistance, pattern and time will look exactly like the Oct-Dec.2018 decline. June should be positive, but if the bounce is weak the next move will be lower to support and 68% retracement for 40 week cycle low - a/C yellow. The final decline for wave IV from 2009 should be one big zig-zag because of time and because it starts with corrective structure.

Bullish - second rally higher to finish wave B for huge expanded flat. It should continue until August, 1,38 Fibo extension for expanded flat points to 3040 as a target exactly where the trend line will be hit one more time. The Fibo measurements for wave B(1,38) and C(1,61) show perfect targets - the upper trend line and the 2150-2200 area, flat is more likely pattern than expanded triangle, so despite the lower odds at the moment I will not discard it until I see the bounce in June showing weakness.

P.S. for those trying to see H&S pattern I think the neckline is lower around the 2720-2730 area. H&S and a/C(yellow) targets are the same in this case.


Long term - one more leg lower to finish wave IV from 2009. If the decline already begun, zig-zag will fit better both time and pattern. The probability for wave B expanded flat(red) is still alive and can not be excluded at this point.


MARKET BREADTH INDICATORS
Market Breadth Indicators - in sell mode for a long time, some divergences(VIX,McClellan Oscillator), that is why it is more likely that the indexes are close to a bottom and not just starting with the third wave.
McClellan Oscillator - 7 weeks below zero with divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - nearing the 25 level where corrections make a bottom.
Fear Indicator VIX - lower high and divergence, I expect one more low before exploding higher.
Advance-Decline Issues - nearing the oversold level.


HURST CYCLES
Day 57... second very long daily cycles which is unusual. It feels like we have the 40 week cycle high which I was talking about.... and the 40 week cycle(bottom-to-bottom) consisting of three long daily cycles instead of four daily cycles.


Week 23... this 20 week cycle is getting stretched, smells more and more like we have reversal.

May 26, 2019

Weekly preview

Selling this week... SPX holding above 2800, but other indexes made lower low. I do not see signs for a third wave and waterfall.
The same thoughts like last week - example sectors like banking and semis with clear impulse lower which is finishing(SOX with extended fifth wave) and retracement expected, cycles and indicators suggesting something higher etc.
All this means on one side huge decline in a third wave is unlikely, on the other side simple correction and another long lasting rally is unlikely too.
I expect the SP500 to make lower low in sync with the rest of the indexes.... quick move lower to test MA200 and reversal higher next week. Most of June should be positive - different shares and indexes need to retrace for a few weeks plus 20 week cycle low expected so the next one even bearish should move 3-4-5 weeks higher.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it is looking like a zig-zag to test MA200 daily.


Intermediate term - looking at the histogram and RSI divergences are building and we should see something higher. Can the SP500 make a higher high when other indexes make a lower high... I do not know, the pattern is difficult. I will just wait to see how the move in June develops.
From the last low in March we have three up and now most likely three down - the options are we have a top and the count is ugly w-x-y or ED is running. Green the ED will need higher high, yellow is the path with zig-zags lower.
The price is trapped between MA50 and MA200 and should spend some time between them. If we have reversal this is the usual path around the MAs - break below it, test, another sell off.


Long term - one more leg lower to finish wave IV from 2009. If the decline already begun, zig-zag will fit better both time and pattern. .
I am not sure how to count this w1, but this is the alternative.


MARKET BREADTH INDICATORS
Market Breadth Indicators - still in sell mode, but looking the McClellan Oscillator for example we should see at least something higher for a few weeks.
McClellan Oscillator - six weeks below zero, this is more like some kind of a bottom and not sell off is just starting.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal in oversold territory.
Bullish Percentage - pointing lower.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - one more low expected.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 44+9, waiting for confirmation if we have daily cycle low.


Week 22 waiting for confirmation that we have 20 week cycle low.

May 19, 2019

Weekly preview

It looks like impulse lower and many are counting reversal.... with sharp third wave around the corner. Looking at different indexes,stocks, indicators and market breadth it is unlikely. It is a mixed picture I can not see neither strong bullish nor bearish case. If we have major reversal why DAX/RUT declined with a zig-zag? SOX/EEM close to finishing an impulse lower and retracement expected not third wave. BA has more to the downside but it should retrace first, or INTC it plunged but it should retrace first before continuing lower, or MSFT 11% from NDX it looks like wave i/5 for the missing final fifth.... there is many more examples. Market breadth - McClellan Oscillator below zero fo a month this is consistent with correction finishing not beginning. Cycles we should expect daily cycle low and 20 week cycle low.

What is the message from all that above? The extremes are not very likely. Bullish extreme the next leg higher begun is unlikely when some stocks/indexes reversed and other need final push higher to finish the pattern. Bearish extreme we have reversal and 1-2 with 3 coming next week 200 points lower does not look likely either when the stocks which reversed should retrace next or some are not done to the upside.

So what are the options - slightly bigger, but still wave 4 from ED shown last week or we have a reversal, but with zig-zag. I was showing on the weekly chart a zig-zag, which fits better because of time, inside this zig-zag wave a itself is a zig-zag(see daily chart). I prefer to see the first scenario with ED, it is always better to see clean finished pattern instead of struggling with some zig-zags.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - not sure, the move higher is corrective so which is it zig-zag higher or zig-zag lower..... no way to say until we see the next few days. If we see lower low I do not think it will be third wave more likely wave c of a bigger pattern.


Intermediate term - if we have reversal with impulse the next move is lower 200-250 points for w3(red). It should move very fast something like 2 weeks because RSI already touched 30 the oversold level and it does not really look like reversal just starting. The only way to override the message from the indicators and market breadth is waterfall decline. Looking at RSI the worst scenario I see is the circles with one more low and we are currently where the red arrow is. Usually this waterfall declines start form a higher levels - green arrows.
In green is shown the ED pattern from last week with 5=1,236x3 hitting the trend line around 2990-3000. In yellow is this zig-zag story.


Long term - one more leg lower to finish wave IV from 2009. If the decline already begun, zig-zag will fit better both time and pattern. If we see one more high decline in C wave impulse will look good - because of possible expanded flat B=1,236xA(see daily chart) and it will push the high a few weeks later.
I am not sure how to count this w1, but this is the alternative.


MARKET BREADTH INDICATORS
Market Breadth Indicators - signaling that the indexes are nearing intermediate term low, but no way to say one more low or not.
McClellan Oscillator - below zero for a long time.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal in oversold territory.
Bullish Percentage - pointing lower.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - nervous markets one more lower possible so one more push higher.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 44+4 close to a daily cycle low or already behind us.


Week 21, as I wrote last week my indicators are telling me this is 20 week cycle low.

May 11, 2019

Weekly preview

Lower as expected, but something different than this w4 from last week. On Monday I warned that something else is going on. Why, it was the perfect looking w4? - TIME. Cycles turning lower and expected decline for at least 1-2 weeks.
Now we have set of 9 waves for impulse around 2830 (one low at 2835 and one at 2825:) but it does not feel bearish.... maybe "a" for a-b-c but that is all. This decline does not feel convincing:
- for important reversal I want to see clean impulse lower closing near the low for the week printing bearish weekly candle - none of this happened.
- on the daily chart we have two failed attempts to move below MA50 and two bullish reversal candles.
- McClellan Oscillator and VIX telling me this is a low and not the start of a big decline.
- I see now two daily cycles and the indicators telling me this is 20 week cycle low.
- I can not see finished pattern to the upside one more high is needed.

To sum it up my intuition tells me there is no reversal, this is 20 week cycle and we will see one more leg up 4 weeks to around 3030 to finish ED.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it looks like impulse, but something does not feel right. Now 2900-2920 is resistance zone. I see impulse testing it, next we should see zig-zag lower to confirm the indexes turned up and move above this resistance zone.


Intermediate term - choppy pattern again overlapping with previous highs, I am not 100% sure where wave b is, but in both cases it is pointing to the same outcome and pattern just the Fibo levels are slightly different.
If you measure the waves 3=1.236x1(both white and red) and 4=1,618x2(white) 4=1,236x2(red). The next high is expected the first week of June and the second 20 week cycle should rally at least weeks 3-4 before it fails(again first week of June). If you draw the trend line it will be hit the first week of June around 3030. If you measure 5=1.236x3=3030(white) 5=3~3040(red).
This is what I expect - 4 weeks higher 3030-3040 to finish ED.


Long term - one more leg lower to finish wave IV from 2009 - D for triangle(zig-zag decline) or B for a flat(sharp sell off as an impulse). Decline in three waves and a low in Q1.2020 will fit better with cycles. I do not know how to count an impulse, but if I am wrong it is wave 1/V.


MARKET BREADTH INDICATORS
Market Breadth Indicators - McClellan Oscillator almost a month below zero, VIX sharp up move to 24... usually this are signs that a bottom is close and not a decline just begun.
McClellan Oscillator - below zero for several weeks.
McClellan Summation Index - sell signal with divergence.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - pointing lower and below 70.
Percent of Stocks above MA50 - pointing lower in the middle of the range.
Fear Indicator VIX - too high too quickly... not sure how to interpret it. Is the sharp rally caused because of the record short VIX positions and short squeeze or we have 20 week cycle low.... maybe both. I prefer to see it testing the low with divergence before the next sell off begins.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
The 20 week cycle took the last train:))) We are seeing the second daily cycle low and most likely 20 week cycle low. In theory both the daily and weekly cycle are strong right translated and we should see another higher high. This will not break the 40 week cycle high idea, it will come later in 3-4-5 weeks and it will be still in the average length.

The biggest problem I have with cycles is to find the 20 week low... sometimes the amplitude disappears and it is difficult to find the low. First you can count two daily cycles(not always clear) - check we have it, and second I use long moving average of the McClellan Oscillator - MA50 McClellan Oscillator. You can see around the red line we have 20 week cycle low and around the blue line we have 40 week cycle low. For example 2017 was very difficult year to find lows:) it is not clear where the 18 month low is and despite that this chart works great to show you where the 20/40 week lows are. So the current message is we have 20 week cycle low - McClellan Oscillator almost a month below zero causing the MA to print this low value despite the indexes rising higher. This is how it can find hidden lows. The previous two plunges begun from a high 10-15 where the tops are and not from a low as we are currently.

Day 43, probably a daily cycle low on Friday.


Week 20... it feels like 20 week cycle low.

May 4, 2019

Weekly preview

One more touch of the upper trend line and corrective pullback running. EW - ideally this is wave 4/c/B, cycles - we have right translated cycle which should make a low in a few days and the next one should make a higher high and fail as left translated. Short said the same like in the last 4-5 weeks.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - looks like we have the ED for v/3/c. As long as the pullback stays around the 2890 area (38% retracement,trend line,support,gap,the previous wave iv) it is the perfect wave 4. Strong move on Friday, some are counting already finished w4, but it looks too short for daily cycle low.
Moving below 2870(50% retracement) and overlapping with the previous high.... means the move from the March low is over.


Intermediate term - another few days lower next week for daily cycle low and w4 followed by one more high and we will have nice clean pattern.


Long term - one more leg lower to finish wave IV from 2009 - D for triangle(zig-zag decline) or B for a flat(sharp sell off as an impulse). Decline in three waves and a low in Q1.2020 will fit better with cycles.
I do not know how to count an impulse, but if I am wrong it is wave 1/V.


MARKET BREADTH INDICATORS
Market Breadth Indicators - weakness most of the indicators with divergences, the next bigger move is lower.
McClellan Oscillator - around zero.
McClellan Summation Index - sell signal with divergence .
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - pointing lower with divergences.
Fear Indicator VIX - series of higher lows with divergence will look good.
Advance-Decline Issues - divergences ...


HURST CYCLES
For 20 week cycle low the time is running out... we should see sharp decline for a few weeks now. If we do not see this happen it will confirm that we have a high of 40 week cycle degree.

Day 38 - the current daily cycle turned lower. It is strong right translated and the next one should make higher high.


Week 19... I suspect stealth 20 week cycle low behind us and the coming high is of 40 week cycle degree.

Apr 27, 2019

Weekly preview

Another week the same price action - one day wonder followed by... nothing. The "strength" comes from the tech sector NDX/SOX, other indexes like NYSE,DJIA,DJT,RUT,XLF,XLE are lagging. After BA now MMM,INTC,XLNX with 10% gaps lower.... is this really strong broad based rally?

Overall it would be great to see one more pull back and higher high(what I am showing in the last several weeks) than we would have nice looking pattern.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I will stick with this count until I see impulsive reversal. NYSE and DJIA with some corrective sideway move, SP500 drifting higher but I see three waves... either v/3 finishing as ED or flat for w4.


Intermediate term - pullback for 1-2 weeks for daily cycle low, to test support and MA50 followed by one more high will look great. This will be nice clean pattern.
Alternate is we have w-x-y from the low in Dec.2018, but I would not bet on such pattern until I see confirmation for reversal.


Long term - one more leg lower to finish wave IV from 2009. Decline in three waves and a low in Q1.2020 will fit better with cycles. I do not know how to count an impulse, but if I am wrong it is wave 1/V.


MARKET BREADTH INDICATORS
Market Breadth Indicators - weakness most of the indicators with divergences, the next bigger move is lower.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal with divergences.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - divergences.
Fear Indicator VIX - refuses to go lower.
Advance-Decline Issues - divergences.


HURST CYCLES
Day 33, decline for 1-2 weeks for daily cycle low expected.


Week 18, I suspect stealth 20 week cycle low and the coming high is of 40 week cycle degree.

Apr 20, 2019

Weekly preview

Another boring week... nothing changed, pullback running and another high expected.

Last week mentioned something about cycles so to clarify - the message is the current high should be of 40 week cycle degree. In this case when the decline starts the price should move lower with short pauses for a few months.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - as long as we do not see impulsive break below the trend line/MA200/gap/support I expect one more high.


Intermediate term - nothing new.... up and down around the resistance levels and divergences.


Long term - one more leg lower to finish wave IV from 2009. Decline in three waves and a low in Q1.2020 will fit better with cycles.
I do not know how to count an impulse, but if I am wrong it is wave 1/V.


MARKET BREADTH INDICATORS
Market Breadth Indicators - weakness most of the indicators with divergences, the next bigger move is lower.
McClellan Oscillator - below zero.
McClellan Summation Index - divergence.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - divergence.
Fear Indicator VIX - oversold a lot of complacency again.
Advance-Decline Issues - divergence.


HURST CYCLES
The average cycle length for 40 week cycle is something like 32-36 weeks. High-to-high analysis - if you count from top to top we are at week 30. For example the previous 40 week cycle high was from the Jan.2018 high to the September.2018 high with length 34 weeks. So this high looks more and more like 40 week cycle degree and when the declines begins it will be for 40 week cycle low, or decline for a few months without a pause several weeks for 20 week cycle low.

The next question is the Dec.2018 low 18 month cycle low or not(longer or shorter 18 month cycles)? The longer it takes the more likely is that the scenario below is playing out - 4 year cycle low in Q1.2020.

Day 29 nearing the top of the current daily cycle.


Week 17.... I think the first 20 week cycle low is behind us and the coming high is of 40 week cycle degree.

Apr 13, 2019

Weekly preview

Grind higher which is not a surprise. The upper trend line was hit one more time with more divergences and now most of the indexes with 5 waves form the 25.03 low.
I expect to see the indexes lower next week, but I have the feeling the real decline will be in May(last two charts). Lets see how the next week will look like.... in fact if you are bullish you want to see a decline NOW than you can count impulse an bullish 20 week cycle. With one more pullback and a high corrective structure will be confirmed.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - impulse from the last low with divergence so next week should be lower. For a reversal we need to see impulsive break below the trend line and the gap.


Intermediate term - late in the cycle with divergences... my feeling tells me one more pullback and a high to finish B.
Some have fantasy about 3000 we have to see acceleration higher in third wave from this levels, but with RSI at 70 I doubt it will happen. The real bullish scenario is decline now for 20 week cycle low and wave 2.


Long term - wave B(more exotic D expanding triangle) running for IV from 2009. If I am wrong it is an impulse wave 1.


MARKET BREADTH INDICATORS
Market Breadth Indicators - with divergences, the market looks tired , the time is getting ripe for correction.
McClellan Oscillator - lower high and divergence.
McClellan Summation Index - lower high and divergence.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - lower highs and divergence.
Fear Indicator VIX - plunge to 12.
Advance-Decline Issues - divergence.


HURST CYCLES
The cycles are getting too stretched... I am starting to think that we have stealth 20 week cycle low in March and the coming high will be of 40 week cycle degree especially if we see one more high later in April and the decline in May.

Day 25 for the daily cycle.


Week 16 for the 20 week cycle.


Two charts DJIA and XOI for really nice finished patterns we need one more pull back and a high then the decline begins in May.

Energy sector and crude oil with very high correlation - both need one more pullback and a high for finished pattern.

Apr 6, 2019

Weekly preview

Higher high as expected, impulse with divergence on the hourly chart so waiting to see what happens next week. As long as the gap 2835-2845 holds the index will continue grinding higher. If we see break below it, with high probability the 20 week cycle turned lower and we should see 3-4 weeks to the downside.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the upper trend line tested twice with finished impulse and divergence. The gap from this week is the line in the sand to watch. As long as it holds continuation higher is expected.


Intermediate term - in the resistance zone with divergences and late in the cycle.


Long term - wave B/X running for IV from 2009. If I am wrong it is an impulse wave 1.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same weak market breadth with divergences.
McClellan Oscillator - above zero with bigger divergence.
McClellan Summation Index - divergence.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - double top.
Percent of Stocks above MA50 - divergence.
Fear Indicator VIX - trend line hit and divergence.
Advance-Decline Issues - divergence.


HURST CYCLES
Day 20 for the second daily cycle. One surprising scenario is we have shorter 20 week cycle and the second one is running.

Week 15 for the 20 week cycle. Another count with shorter 18 month cycles possible.