Short term - I see zig-zag higher for a and flat for b now c running. Target is 2550 c=0,618xa and the April.2018 low as resistance. Extension to 2575 is ok 50% retracement of the December sell off. Anything above that and the probability is higher that the bottom is in.
If I am wrong we will see higher low and fractal similar to April.2018 reversal beginning with a zig-zag.
Intermediate term - the same patterns on the daily chart. The resistance zone around 2550 should be tested and if it holds or not will tell us what is going on. So far no confirmation for reversal - no impulse, the price is below resistance, below MA50, RSI just trying to test the trend lines.
At first glance if we see one more low it counts like impulse from the September high(5/C/IV green) - I think this is wrong. Looking at RSI it is neither w4 from the December high nor w4 from the September high. I Think we have second zig-zag(my initial pattern) but bigger with 1,618 Fibo measurement.
Alternate this second leg lower and the whole pattern is finished. The bottom is in with pattern similar like April 2018(the circle) - higher with zig-zag, but mirrored in April the second leg of the zig-zag was the strong one now the first leg is the longer one.
Long term - corrective A-B-C is running and the question is when it has begun in January(green) or September(red). I prefer the red scenario - time(cycles) and pattern fit better.
RSI looks exactly like the a-b-c January-April.2018 and I think we have one more leg lower with divergence for another a-b-c/A and not an impulse.
MARKET BREADTH INDICATORS
Market Breadth Indicators - turned up, some with buy signal, but it is more likely to see consolidation/bottoming and divergences before we see strong buy signal with low risk.
McClellan Oscillator - very strong move above zero after extreme oversold levels now very overbought.
McClellan Summation Index - turned up, buy signal.
Weekly Stochastic of the Summation Index - sell signal, in oversold territory.
Bullish Percentage - turned up, buy signal.
Percent of Stocks above MA50 - turned up.
Fear Indicator VIX - turned lower, most likely we will see a divergence and buy signal.
Advance-Decline Issues - strong move up, most likely we will see a divergence and buy signal.
HURST CYCLES
Day 27 for the daily cycle, another 2-3 weeks and lower low will look perfect for 40 day cycle low.
Week 10 for the weekly cycle, another 2-3 weeks and lower low will look perfect for the expected shorter 20 week cycle.
I'm a little confused on the timing of your price charts - between the short-term and intermediate term. it looks like the short-term chart is anticipating a low in the next week while the intermediate term chart suggests a few weeks away. Could you clarify your position? When do you anticipate the next low? Thanks.
ReplyDeleteIn two three weeks.
DeleteHi Krasi.. looking at your long term chart. I am wondering why you prefer the red scenario? I mean red III. Despite the time cycles. They may just coincide with some major pattern developing. I remember your previous postings before the fall in October. You were quite certain that the upward move was a B wave from April low. Wouldn’t it be more obvious and simpler to keep that way and assume that we are experiencing a huge expanded triangle that started in January? Your B wave prediction is still intact and now we are in D wave which should make a new high followed by a huge drop to below recent low with E wave. It would look like your forward red line prediction but with a higher high. What do you think. Thanks
ReplyDeleteWhich is more likely expanded triangle from January or a flat from September?
DeleteIt depends what we keep constant.. if we had B wave from april to September then it could be either expanded flat from Jan till the last low a week ago or developing expanded triangle with D wave rising now. If it was an expanded flat the correction is likely over ( though one last test of recent low is possible). The second assumption ( another constant) is that we are in wave IV. If that’s the case the question is if it can be shorter than wave II which lasted 17 months, 05/2010-10/2011. It seems to me that waves IV tend to be longer than waves II so I am leaning towards expanded triangle now. But keeping one thing in mind that we had a B wave between April and September. If it was a regular motive wave then we can’t tell what type of correction ( starting in September) we are in yet, it’s too early to tell, I think. So my question to you is if you changed your mind about that wave B. Does it still look to you like B or do you think it looks like a motive wave? That wave is the key to narrow down the possibilities now. What do you think? Thanks
ReplyDeleteI think you focus too much on theory. The truth is you can not say with high confidence if it is B or not. I focus on trading - extreme levels for market breadth and oversold indicators means higher for a few months. I will trade it and see what happens:
Delete- major top - 2 months higher to MA200 10%-15%
- top in September A lower B higher - 3-4 months higher 2800-2900 20%-25%
- top in January wave 4 from 2009 finishing - many months higher >3000 40% or more
I am fine with every outcome there is enough time and price to trade. Then the market will show the pattern.... simple. There is no point to make a decision now.
The analysis only support the trading plan nothing more. All patterns point higher long trades period.
After that we have our analysis and when the market makes it move it will reveal us the pattern and the trading plan will be adjusted accordingly.
I appreciate your response Krasi..I find it very difficult to focus on short term market moves... and I prefer medium to long term horizon. One reason is that emotions tend to overcome my decisions when trying to predict short term market turns. So I switched to medium-long term trading, that would explain my focus on theory. I chose to trade VXX long term puts to match my longer term horizon. VXX goes down as the market goes up or when it is steady.. but not only.. it also goes down because of its defective structure. All I need to know is if the market is still holding up and not falling off the cliff.. i don’t want to be caught with VXX spiking to $100 or so. As long as it plays out I can ignore the short term market gyrations.. I hope you don’t mind me posting my assumptions on ensuing and developing wave structures. I always look forward to your feedback on those. I am also hoping that your feedback to my questions will benefit the others on this site. Thank you.
DeleteI am talking about intermediate term time frames a few months too.
DeleteThere is no triangle, there is no impulse lower to suggest flat from January.
Two options already described above - minimum one more lower low needed to count W-X-Y from the January high(it could be A too) if we see test of the low with higher low the top was in September and we have A and B running.
Krasi what is your current Target for uvxy I've been shorting this thing from 75 80 and 90
ReplyDeleteIt should turn one more time higher and then below 40.
DeleteWhen you say turn up how high on uvxy and then down to 40 thanks for your prompt attention I also feel it's going to 40 as well you feel we're going to turn up to 70 80 again
DeleteI meant to say 80 to $90 on the turn up
DeleteIf the indexes make lower lows something like 90.
DeleteThinking we get a high today , but could be anywhere from 2570 to trendline resistance around 2600.
ReplyDeleteto me , Europe looks to have bottomed and will want to re-long on a wave 2 /b dip .I guess we'll find out soon enough if spx has bottomed too.
Zig-zags everywhere including Europe so there is no convincing bottom.
DeleteOn a micro level , looks like 5 down from 2579 ...it's a start.
ReplyDeleteditto today 5 down from 2589 ...try a short on the 61% retrace , hope you don't get stopped ...loser yesterday , jury out today.
ReplyDeleteSee low 2600's as next resistance if the rally continues..
I am short too... I do not see how this is something different than a zig-zag.
DeleteWorst case 50% retracement and if we are lucky lower low:)
We could go down to 2549 in a b wave just my opinion buddy
ReplyDeleteThere is also a possibility that we hit 2593 to 2609 before we have a pulled back use your own judgment we can continue with a wave up to that level and a b-wave down and that could be 2549 Next Level 2520 and after that 2468 both of the levels that I see
ReplyDeleteAt least lower to 2400-2450 even lower low is possible.
DeleteEverybody so bullish, but this move is nothing more than a corrective zig-zag.
Too far too fast from MA50 and now snapping back, typical price action.
Krasi, Is there a logical stop loss on a short from here? what level higher would scare you from here?
ReplyDeletethanks!
If I see an impulse higher, but this is looking very unlikely.
DeleteThis move feels like it's taking too long. Killing time and resetting indicators? Visually compared to recent corrective tops, it looks like it is missing the big final gap up day which reverses lower throughout the day amd commences trend change?
DeleteYes, it is taking too long because we have a bottom. This is the message.
DeleteThe more likely outcome is different - with such very slowly grinding moves you wait for a sudden move lower and one more time up for topping process.
Interesting...well then I don't want to be short anymore then :) I've actually been trying to find a recent example of a grinding move like the one we're seeing...would love to be able visualize what you mean by 'sudden move lower and one more time up for topping process'if you can remember a date off hand. Irrelevant now, but recent examples of the missing final 'gap up' day I was referring to are Feb26-27, Mar9-13, Oct17-18, Nov7-8, Dec3rd...crazy, they really all look the same, but I can never have the patience to wait for it to complete before shorting :)
DeleteThe final fifth wave of c is already running. This drop was spread in 2 days 9th and 10th 35 points and I think we will a high soon probably on Monday afternoon or early Tuesday.
DeleteThanks! Please let us know if you cover the short. Much appreciated
ReplyDelete