Short term - most of the EW guys are counting impulse green. For a real impulse I want to see one more w4(yellow) and 5. I think it is just a-b-c(red) RSI broke the trend line and testing it with divergence and this is a sign that the pattern is complete.
Intermediate term - It looks like wave a/B to me. Some expect lower low other continuation straight up... for me this scenarios have very low probability. I think we will see something like March 2018. Sell off, retracing most of it and another leg lower.
Long term - wave B running for IV from 2009. Possibilities are simple zig-zag or triangle to burn time.
MARKET BREADTH INDICATORS
Market Breadth Indicators - the big picture is positive buy signals, short term it is time for a pullback.
McClellan Oscillator - extreme followed by double divergences.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal in overbought territory.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - above 75 signaling strength.
Fear Indicator VIX - expect pop higher.
Advance-Decline Issues - divergences.
HURST CYCLES
Day 26 for the 40 day cycle. I think it will turn lower soon and 40 day cycle low mid-February.
Week 6 for the 20 week cycle. Shorter 18 month cycles possible with 4 year cycle low this year, so we will keep an eye how fast the pattern develops.
Personally, I think prices will move lower to 2369 on 20/2
ReplyDeleteVery unlikely, even if this is the right pattern it will not play out fo two weeks.
DeleteHi Krasi! Thanks you for your update! just to clarify, your short term chart seems to imply a 50% retracement mid February, whereas the intermediate one shows that retracement only in march after having retraced most of the February sell off to circa 2600. Which do you think is more likely? Thx a lot and good luck trading!!
ReplyDeleteWe will know when we see the decline. That is why it is not precise and I did want to explain in depth.
DeleteWe have a lot of strength market breadth says that not not just the price. So we should see 40 day cycle low around mid-February. Then the next 40 day cycle will try to make a higher high and decline for 20 week cycle low somewhere between mid-March and end of March.
The bearish and in the same time bullish case is quick sell off 50%-62% retracement for two weeks, higher high first half of March for 1/c/B and lower second half of March for 2/c/B above 2600 for 20 week cycle low.
The complex path to burn time some kind of flat double top for simple flat or higher high for expanded flat.
The point is watching how the decline looks like and closing the shorts mid-February.
Thx a lot krasi! All in all, your view (subject to the way the next decline unravel) is circa 50% retracement in February, and another 40 week low rather on the back end of march, making a higher low then... I am struggling to assess if the lowest low for the first half of 2019 is rather in February or march.... I guess we will see in the next two weeks...
ReplyDeleteIn theory it should be in February, because after such strength the 40 day cycles should make higher lows, but as I wrote it will not be a surprise to see a flat for example.
DeleteKrasi, is it likely that we have completed ALL OF IV from January to December 2018? I don't think anybody is taking that scenario seriously. The breath of this advance is very strong and it seems people are scared to invest right now. Everybody is looking for that second leg down to finish the decline.
ReplyDeleteI do not think we saw IV. Time and pattern does not fit, but we will see higher prices for sure.
DeleteThe history of V shaped recoveries is that they usually( but not always) retrace entirely .
ReplyDeleteEveryone talking about the 200d today - far more relevant to me is the 50 day weekly average . If you look back at past bear markets , that very frequently repels rally attempts and sets off significant further declines . Today that's at 2730 , where I added to shorts earlier .
The high today is now important imo . will reassess on a close above it as needs be.
There is enough signs to support a high... only nice reversal candle is missing:)
Deletehigh in Krasi ...nice 50% reversal in time , 84 days down ,42 days up.....
ReplyDeleteSome are using Fibo measurements for time... I have no experience and I do not know if it works:)
DeleteAny thouights on the Australian Index....almost looks like 3 of 3 up.....perhaps a better vehicle to buy when S&P corrects.
ReplyDeleteThe same pattern like SP500. I can not see any difference. It is a high not 3 of 3.
DeleteTime for a good puke into the close tonight.. Fib retracements much lower & conceivable this drop is as sharp or sharper than the preceding rally. 2660 the first area I'm looking for
ReplyDeleteHi Krasi! Sooo, that was a pretty uneventful week... do you see reversal yet, or yesterday’s comeback argue for a retest of the highs?
ReplyDeleteThx a lot!!
I think we have reversal and impulse lower. If I am right we will see zig-zag higher Monday/tuesday and continuation lower.
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