Jul 7, 2019

Weekly preview

Positive June as expected, but shallow pullbacks and a new high. First the bears wanted to sell the bottom now the bulls are buying the top:) Nothing new under the sun, the usual Fed bla bla, 3200-4000, trading emotions and not the charts.

We are seeing c wave which will finish the zig-zag from the December 2018 low. This last leg from the June low is weak building divergences only short term topping is missing which we should see in July.
The big picture - nothing has changed, decline in three waves or impulse for 4 year cycle low in 2020 is expected.

Short term - one strong week, multiple divergences... I do not know how to count this as impulse, may be some kind of ED.
As long as the price stays above 2910(red) we should see one more high.

Intermediate term - close to the trend line, another week or two higher to touch the trend line with divergences will look perfect. RSI touched for the second time overbought level and it looks similar to the previous two occasions short before a move lower.... just the topping process is missing, I do not believe the index is in the middle of a third wave.

Long term - the indexes are close to the top of wave B or D, when it is finished decline in three waves or impulse is expected.

Market Breadth Indicators - reached overbought levels with divergences, now topping short term divergences and turn lower is expected.
McClellan Oscillator - divergences.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, overbought level reached.
Bullish Percentage - buy signal and divergence.
Percent of Stocks above MA50 - buy signal and divergence.
Fear Indicator VIX - touched again the long term trend line from 2017 and divergences. Only short term divergence is missing.
Advance-Decline Issues - very weak, divergences, sequence of lower highs since the bottom in 2018.

Day 23 for the 40 day cycle.... nearing the top for this daily cycle.

Week 5 for the current 20 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Weak price action, there is no finished setup - short living initial rally and too much overlapping.

One more week is missing to see finished countdown on the weekly chart.


  1. Is it possible 3 june was 40 week cycle low with two 20 week cycle of 11 weeks?

    1. This is way too short for 40 week cycle.

  2. Hi Krasi.. wave c can range from 50%, 61.8% to 161.8%... which means 3030 or 3100 or 3700 respectively for s&p. You suggest 50% or maximum 61.8%, I understand, correct? By the way, it nice to have you back on your website. I am hooked to it.:) I hope you had a great holiday.

    1. Thanks Kris!
      Usually it is 61,8% or 100% sometimes 50% or 161.8%.
      With such first rally for a it is more likely 50% or 61,8% for c, which is around the trend line.

  3. A growing trend with almost no pullbacks- why would there be such a powerful correction that you drew? There must be some very good reason for the correction - in May 2019, for example, for almost 2 weeks we could not break through 7841 level of Nasdaq and that correction was very weak - it is clear that they were trying to redeem it. This week there will be a correction to 7699 Nasdak, because there is an unclosed gap and everyone sees it, from there I think there will be powerful BUY that will take us to 3100-3150 by S&P and if there are sharp sharp drops there, as in September 2018, or there will be a strong level that we will not be able to break through for a week or two or a double top like in 2018, then maybe and your option is correct - there will be a correction to 2600 by S&P. Now shorts are very stupid, except maybe intraday.But in general, I agree with you - with very very strong pullbacks upwards, we can break through the lows of 2018 in the end. But first you need to see some kind of a big candle down from 3100-3150 and already try to enter after the correction after it.

    Thats what i think:

    1. Because it is a corrective pattern, which should be finished with another leg lower.... and the 4 year cycle is not completed either.... and many stocks finished third wave form 2009 time for fourth wave.
      This is the sixth week and RSI hit overbought level twice, the powerful BUY is behind us... now is chasing the last 50 points.

  4. About the 40 week cycle low in August, is it obligatory it makes new low below 20 week cycle low of 3 June?, thank you

    1. No, it is not obligatory, but if the move from Dec.2018 is finished we should see lower low.

  5. I think we are in b/bB, in August c/b/B around 2700

    1. It is possible... I watch this for a while and I hope it will play out because this will be the most profitable pattern.

  6. Krasi, can you put the long graph to see the canal, with the purpul line?
    I don't understand wher it's came from?

    1. Zoom out monthly logarithmic scale - https://imgur.com/a/CCXWe65

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