Mar 2, 2019

Weekly preview

One more hit of the trend line(first chart) and corrective pullback as expected. The price action so far confirms the primary scenario iii-iv/c/B running. As long as the price stays above MA200 around 2750 I expect one more leg higher...

RUT has impulse lower, but the major indexes SP500/DJI/NYSE nothing more than corrective pullback so far. The big picture - European indexes, Emerging markets, Crude oil all with zig-zags higher. I think all markets are in sync and despite the strong move for the US indexes it is the same pattern - just corrective zig-zag.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - difficult to see reversal pattern, only corrective crap. Most likely we are seeing wave iii-iv of c/B. In this case we should see one more move lower to finish iv and v should make new high. The signs point to something around 2870 - several Fibo measurements, one more hit of the trend line, resistance Jan.2018 high.
What bothers me is this final zig-zag in the circle so something slightly different could be playing out - see the second chart.

Different outcome, but only short term which does not change the big picture.


Intermediate term - first resistance hit and as long as the price stays above MA200 the next target should be the Jan.2018 high.
The indicators showing that the trend is exhausted - best case is one more high with divergences to finish a-b-c/B.


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


MARKET BREADTH INDICATORS
Market Breadth Indicators - double divergences for the oscillators like A/D line and McClellan Oscillator. The trend following indicators are still pointing up.
McClellan Oscillator - around zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, in overbought territory.
Bullish Percentage - slightly above 70.
Percent of Stocks above MA50 - very overbought.
Fear Indicator VIX - nearing the trend line, expect intermediate term low soon.
Advance-Decline Issues - divergences and turning lower.


HURST CYCLES
Day 45 for the daily cycle.... wondering if we have three shorter cycles 3x~25 days instead of 2x~40 days.


Week 10 for the 20 week cycle. Another option is shorter cycles and this is the second 40 week cycle for the last 18 month cycle.

36 comments:

  1. What's going to drop this Market I don't see it

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    1. There is no need of special event/news. The market just moves higher or lower.

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    2. And just like that without news 50 points lower:)

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  2. It looks like the pattern from the first chart - flat pattern for wave iv and the lower trend line hit. Now the bulls should step in and buy the dip to clear the ugly candle.

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  3. & then we see whether it's a higher or lower high . Should be done this week either way ...

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    1. Then at least 38%(max 50%) correction until the first half of April for 20 week cycle low.

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    2. Still learning here, 50% of what high?

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    3. The high which will finish the move from the December low... still waiting for it this 5/c.

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    4. Cool, and that 50% is around 2100?

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  4. I think we have started b of B

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    1. One more high will look much better including Europe, crude oil.... no reversal signature either so far.

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  5. But that more high for a/B or B?

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    1. It should be B... it can be confirmed only when we see the decline after that.

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  6. When I look back over the last year , the "final high" or final low" to make a pattern look complete has rarely come - we'll see this time .......

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    1. Yes, it is very difficult to nail tops/bottoms no matter how good the analysis are. The only option is to adjust the trading plan to this facts.
      It is taking too long, RUT does not look good so maybe the top is in, but as I wrote for me the low risk trade is the second top not this one no matter lower high or higher high with divergences.

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    2. No truer words said.

      Anyone following elliott wave in a vacuum got left in the dust at the Christmas eve low if they were waiting for one more wave down.

      Everything I follow is rolling over now.

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  7. Russell 2000 looks to have topped already although Asia still happy

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  8. Next high? I'm confused, is this impulse lower and time to short? or are you still expecting 2870?

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    1. No matter the pattern short trade with low risk is not this high but the next one.
      Wave b or 2 - I want to trade the c wave of the correction
      Wave B and one more higher high - you should trade the final high with divergence.
      Wave B finished - wait for confirmation first and the high should be tested with such strong cycle and market breadth I do not expect sudden plunge.

      Currently I do not see impulse lower, which does not mean it can not develop in the next days. I am just waiting for a trade with low risk and I do not think this is now.

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  9. Thank you that's helpful trading strategy color. The reason I asked is that in this week's update you said "As long as the price stays above MA200 around 2750 I expect one more leg higher..." and sure enough we went through it and closed below the 200dma. Maybe I'm reading too much into the importance of that part of your comment this week...but given the downside you are forecasting, I would've thought the low risk trade would be to short against Monday's high since it's hard for me to see much of a b or 2 wave in the recent corrections we've had

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  10. This waves 2/b should take weeks and the low should be 20 week cycle low in April so there is enough time.
    Now the price moved below my target for wave 4 and I have to look for another possible patterns. Another higher high is not a guarantee any more in fact the only way is if this is w2 of ED.

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    1. Do you mind showing what w2 of ED would look like in the update? Thank you

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    2. Not my favorite pattern, the indicators do not really fit, but who knows if we see a continuation next week to around 2800 to negate the ugly wekly candle - https://imgur.com/a/p2y8Fgg

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  11. Replies
    1. 2670 is just the first leg lower, it will take until April for the next important low.

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  12. Krasi, Do you know where I can find the a/d line with all Usa stocks? not only nyse

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  13. SPX is really starting to fucking piss me off... People who buy and hold and never look back, those are the only people I know that make money anymore, they don't stress, don't have any trading costs, no taxes, nothing. easy stress free and they do better than 99% of active money managers. An infinite amount of money can be created out of thin air, and Central Banks just told us they will do this to protect asset prices, so why the hell would anyone want to hold cash or be short stocks especially in a massive buyback environment? There, i just needed to blow off some steam

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    1. p.s., am pissed off because I'm always looking at shorting instead of going massively long, everytime. This end of day rally was my last straw.

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    2. There is something very wrong with your approach when you are so angry and look for explanation FED, QE etc. Do not worry there will be more to the downside.

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  14. I hear you... shorting at the right time is the hardest thing to do, I learned my lesson too, cost money let me tell you. But if you right the reward it big and quick. Or get rich quick, same idea, never easy. But relatively speaking equity markets provide the least difficult opportunity to do it... it can be learned. My advise is this : don’t bet a lot on shorting, if you are right then small bet can bring you nice profit. And if you are wrong, not big deal. Good luck

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  15. Im sorry but I am an old trader investor and if you want to make $$ trading / investing you MUST be as prepared to buy and sell.......especially with QE...I agree with Krasi we see 3000 by S&P in next 1-2 years so selling is against the trend BUT surprises are with the trend. Good luck my friend :)

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  16. Any thoughts on Palladium Futures?

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