Jul 27, 2019

Weekly preview

No follow trough to the downside obviously bigger than expected w4... I have shown updated version of the ED and since than the price action confirms the suggested pattern.

The big picture has not changed, just more divergencies - bearish indicators/market breadth/cycles and TomDemark finished countdown on the weekly chart. Now waiting the pattern to be finished and see confirmation for reversal.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - there is enough waves to call a top, go to shorter time frames and you will see finished impulse for possible c/5. BUT there is great sell the news event - FOMC and so far all a and c waves form 1/3/5 developed as zig-zags not impulses.
The perfect pattern - wave 1/3/5 are zig-zags and within the waves a and c are zig-zags it self too (this (a) (b) (c) labels). If the pattern and RSI from w1 and w3 repeat than we are at the point marked with the green arrows from the previous two occasions, and we will see small pullback Monday and last rally for (c)/c/5.
The perfect pattern is another zig-zag for c/5, a/5=c/5, (a)/c/5=(c)/c/5, 5=0,618x3(ED) aaaand all this Fibo measurements point to the same target 3044.

Now we can only wait and watch if the perfect pattern/Fibo will play out or the market will reverse prior FOMC. 10 points lower on Monday is ok, 20 and more will look bad. Below 3000 is the first sign for a problem and below 2975 will confirm a move to the downside is running.


Intermediate term - the trend line is tested one more time. RSI - after the broken trend line now we have divergence.
Nothing really changed, just timing - the next bigger move should be decline to at least MA50 and daily cycle low.... I think something like two weeks lower, two weeks higher and in September the decline really accelerates.


Long term - this should be the top of wave B or D and decline in three waves or impulse is expected.


MARKET BREADTH INDICATORS
Market Breadth Indicators - another short term divergences and turning lower again despite the strong day on Friday, the indexes are close to intermediate term high.
McClellan Oscillator - around zero, most likely will see another lower high.
McClellan Summation Index - turning lower after divergences.
Weekly Stochastic of the Summation Index - turned lower, sell signal.
Bullish Percentage - divergences short and long term, pointing lower.
Percent of Stocks above MA50 - divergences short and long term, pointing lower.
Fear Indicator VIX - bottoming and longer term divergences.
Advance-Decline Issues - another lower high and turned lower again.


HURST CYCLES
Day 38, I doubt we saw daily cycle low. I think it is topping and it will turn lower for 2 weeks.


Week 8 for the 20 week cycle. As explained last week the longer cycles 40 week(both high-to-high and trough-to-trough) are ripe for reversal.

47 comments:

  1. Hi Krasi, this was a question from the previous week. How are you counting 5 waves from 1932? Can you show your long-term count from 1932. I've read Peter Temple's work and it makes sense to me. Here is what I see.
    https://www.tradingview.com/chart/DJI/eoqafwWM-Long-term-projection/

    Thank you.

    ReplyDelete
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    1. I do not like his counts, I do not like his arrogance..... he studied thoroughly the R.N. Elliott work and only he understands it and no one else.
      No, his count does not make sense at all. All his talking of impulse which is not impulse is crap which produces crapy counts like this B wave.

      - So wave a lasts 1,5 years and b 13-14 years and it is three times the sizes of a.... and this is expanded flat? - are you kidding me.
      - Full of wrong counts - your wave a is impulse not a zig-zag, wave b is impulse not a zig-zag, 2002-2007 your wave v/5 is a zig-zag not an impulse.
      - When I want to confirm a count I look at the RSI pattern and trend lines - extremely high success rate more than 90%. So open the monthly chart, add RSI and look what it says - divergence between the highs 1987-1997-1999 - waves 3-4-5. Then what follows is clear zig-zag confirming correction from 2000-2009 plus it confirms that 2002-2007 is zig-zag.
      RSI never lies - pretty clear patterns.

      We have wave III impulse from 1932 with extended fifth wave - https://imgur.com/a/VEXN0zI

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  2. Evening Krasi, The Russell keeps nagging my view, it feels unfinished on the upside with over 10% remaining!

    PS Appreciate the thoughts.

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    1. The last leg up running and currently w3 of it should be running... target for c/B around 1630.

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  3. I see a problem with the ED, the waves 1 and 4 are not overlapped

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    1. It is diagonal structure - impulse with zig-zags. From the beginning I am explaining that this is another corrective move and I am watching for ED. The market continue to follow the forecast so I do not see a problem.

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  4. If this 40 week cycle ends in October and we expect a 4 year cycle low in q1 2020, the next 40 week cycle would be too much short ???

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    1. More likely Q2, time is not adjusted on the charts for the next one year just a decline is shown into 2020.

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  5. it will go as high as 3047 from 2007 peak to low in 2009 at 2.618 exterior retrace.. then possibly test 2950 most likely break the trendline to 2900 to really test it then possible fail. Before or after Fed meeting will be interesting to watch. Mid August or September will really be tough for the market.

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  6. Are we on the c wave now Krasi to ATHs?

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    1. Yes, this should be the final zig-zag higher... as long as 3000 holds. This is the line in the sand, it was tested today, nice jump higher so it should continue for a few days.

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  7. Does this impulse down mean anything or is c wave now dead?

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  8. It might be a small flat that started on July 15 and ending today. If correct we may have a couple more days higher for the last push. What do you think Krasi?

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    1. I think this is reversal and not a flat.

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  9. Don't you think we are going to test 2950-60?

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    1. It was tested I do not get the point.... no I do not think this is wave 4.

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  10. What is good entry pt for short position then?

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    1. The first was break below 3000 the next one is after confirmed impulse lower and corrective move up staying below 3000.
      First we need waves 4 and 5 today/tomorrow to confirm impulse. Then zig-zag higher next week below 3000.
      If this conditions are satisfied - this will be the next short entry... the stop should be above the highest high, but above 3000 it does not make any sense any more.

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    2. Thanks. I stopped out above 3000 already...that didnt take long;)

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    3. Could it be a leading diagonal if it has now gone above 3000?

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    4. It is such a mess it could be many different patterns:)
      It is rare only when I see the fourth and fifth wave will consider such pattern.

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  11. The whole wave from December may be a contracting ending diagonal where we have started wave 4 yesterday. Triangle on EEM. If so- crash in the fall.

    ReplyDelete
    Replies
    1. If we see only a zig-zag retracing 50% from the June rally.... I do not see a lot of evidence for such pattern, but who knows.

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  12. On your long term chart , it's possible III printed in Oct 18 . In that case the A wave would've been just 2.5 months and there would be cause to see a similarly violent C wave which would bottom this autumn .

    It's an option that I guess will be more likely (or not) when the speed of the first wave down is clear - thinking we see 2750+/- in August , but I'm expecting 2900/20 by tomorrow , so we'll see.

    ReplyDelete
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    1. Timing does not fit much. The 4 year cycle does not look complete and I see the low in Q2 probably
      Many stocks just finished wave III and wave IV should take some 6-9 months 2-3 months is too short.

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  13. It is not an impulse

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  14. Replies
    1. Crazy moves... try to analyze this:) I am still watching on the sideline focusing more on the big picture and waiting for the dust to settle down.

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    2. But if you are looking for 25% correction why wait on the sidelines for the dust to settle? We are less than 3% from the ATH

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    3. First I do not trade what I think(this is just expectation for the future) I trade only when the market confirms this expectations.... most likely we see this now.
      Second this decline should be in three waves and twice we should see 2/3 of the declines retraced.
      It should be traded and not sell and wait especially if you speculate like me with triple ETFs:)

      This first decline should last only 2-3 weeks and big portion of it should be retraced so I am not in a hurry. I already wrote the bigger decline will begin in September.

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    4. And if the 2/3 retracement ends up being = to 2850 you won't mind?

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    5. Not at all, the bigger the retracement the better.

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  15. Thinking in 2020, how can we confirm we have a 4 year cycle low ?

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    1. Nothing special, the usual - time for a low, finished pattern, divergences indicators and market breadth etc.

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  16. I think we are in 1 of c of b of B

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    1. This is unrealistic neither time nor measurements fit.

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  17. there's the 2920 predicted y'day .....looks like 2900 has a shout today too .

    Nice start to a C wave .. wait for a bounce next week to reload for August blues

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    1. Looks like third wave with 4 and 5 to 2900 will do the job:) then bounce higher.

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  18. Any chance of 2200 in october?

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  19. Why don't you like the count of b of B?

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    1. It will extend way too high and this will not be B any more.
      b/b/B lasted way too long timing does not fit any more.
      Many stocks finishing III from 2009 or B flat does not fir any more.

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  20. Hi Krasi... if snp low of 2914 was the lowest for this drop it is 38% retracement from June 04 low. It might be just 4 of c with one more higher high to come. In addition it did not violate wave 1 of c. What do you think?

    ReplyDelete
    Replies
    1. I think you should stop falling in love with a pattern and start listening to the market:)
      What should wave 4 do - wasting time or sinking like a rock?
      Should w4 retrace 38% of the whole move or from w3?

      You have decided this is the pattern, it is not happening and you are looking for excuse why the market should do what you want.... it does not work this way.
      It is normal, it took me years:))

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    2. I have been waiting so long for this drop that I don’t want to be disappointed this is not it..:) so far the pattern is the same as the one between feb 25-March 08. Today’s correction started on July 15 - august 2. Small expanded flats, one for the 4th wave of A then. Like today 4 wave of C which started on June 4. Same time frame and the same depth. To me the C wave is too short, it did not even reach 50% of A. Just an idea.:)

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