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.

34 comments:

  1. How we can confirm that we have 20 week cycle low?

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    Replies
    1. Closing a few days above MA10 on the daily chart to confirm that the next daily cycle is running... on the weekly chart to see a few weeks higher.

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  2. Hi Krasi,
    What would make you change your mind about a third wave waterfall?

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    Replies
    1. Simple it has to decline fast like Feb.2018 or Dec.2018 because it is the third wave... but this is not happening so far, instead the indicators are resetting.

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    2. So we should buy now? What is a good stop loss level?

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    3. It depends on the time frame which you trade and your risk profile.
      I can not say 100% this is the pattern(the bigger picture), I can say the current move is a zig-zag testing MA200 and based on indicators and market breadth the next move is higher for 2-3 weeks at least. The risk is we have 1-2 i-ii and it end abruptly after 1-2 weeks.

      There is no stop level we have not seen a reversal to put a stop at some level.
      At the current moment the approach is the following - I think me have a zig-zag testing MA200 I assume a reversal higher will follow and start building long position. Starting small 1/3 or 1/4 if it does not work small loss, if you see strong reversal day another 1/3. If it fails small loss or profit, if you see follow trough another 1/3 for full position. You define full position based on money management rules(on the right sight there is a short post about this topic) and then you have your 1/3.
      This is something what I do, I can not say if it fits to you.

      Personally I like DAX at the moment clean pattern with possibility for a new high to finish the whole move from the Dec.2018 low.
      Looking EEM/DAX/SP500 they all will look better with one final low probably today w4 and tomorrow w5 to finish the whole zig-zag which begun on first of May.

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  3. Hi Krasi, if you could, I would appreciate your thoughts on CAC and DAX at present. Also Hong Kong and China markets are looking like reversing today - thoughts?

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    Replies
    1. and it appears SP500 futures just touched MA200

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    2. CAC/DAX/SPX they all look the same - like a zig-zag testing MA200. Hong Kong/China finishing an impulse lower.
      What could go wrong sharp acceleration below MA200... I do not see signs for that.
      If the the top is in more likely diagonal and deep retracement around 2900 for w2 - three wave higher or in sync with all other markets which are showing impulse lower - HSI/SOX/EEM.

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  4. Assume that's the B wave done ( with a lower low ..!) & now we rally towards 2870-2900 by mid June.

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    Replies
    1. Very difficult to say if B is finished or not... but yes we should see something higher.

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  5. I think it is more likely 20 week cycle low than wave C

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    Replies
    1. Everything behaves like we have intermediate term low... the only way this to be C is if the market crash.

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  6. Vix ain't acting like a dropis coming

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    Replies
    1. Many indicators act this way:) that is why I do not see huge plunge starting.

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  7. For perfect pattern we need a few more days up and down with two more lower lows to complete an impulse and zig-zag with a=c --- https://imgur.com/a/ftJfMO3

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  8. bynd looks like its headed alot higher possibly 140

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    Replies
    1. As I wrote it is not worth the risk to short...

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  9. krasi what do you think about this chart
    https://imgur.com/a/23uAslE

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  10. Is gold starting impulsive up wave or another final wave down to reach bottom? I recall you said gold would go up for intermediate term wave? Thanks.

    ReplyDelete
    Replies
    1. The intermediate term wave begun last year, in the last long term update I was expecting lower around June.
      Now I do not see important low. I think we will see something higher... like testing the highs around 1370 and then it will turn lower for the final low(4 year cycle low) late 2019 or Q1 2020.

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  11. With futures down almost 1% at 8pm EST there is high probability this is wave 3, spx may go down to 2650 as per 1.618 of wave 1.

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  12. Krasi, which post are you referring to above (for 3/c)?

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    Replies
    1. Chart posted above - https://imgur.com/a/ftJfMO3

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  13. https://www.labolsadepsico.com/sp500-figura-peligrosa/

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    Replies
    1. This H&S are so obvious... and they never work. There is no the right conditions for this pattern.

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  14. Do you still think that this is a 20 weeks cycle low?, and then 6-8 weeks around 3000-3100?

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    Replies
    1. Yes, it is still possible, but there is an option that the indexes already reversed as explained above.

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  15. For those watching H&S if this is the pattern I think this is still the head. Next we should see the right shoulder. If I measure my zig-zig reversal target and the H&S target they both point to the same target. Looks perfect... the point is we should see something higher before plunge lower.

    This is the chart - https://imgur.com/a/z8Fv7f7

    ReplyDelete
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