Dec 21, 2019

Weekly preview

Two weeks higher as expected. We have full set of waves and I think this is 5/c/B completed... now waiting for reversal signs. I am short SP500 and crude oil, do not do like me wait for confirmation.

The current top is different compared to the previous two - the market sucked in everybody, the whole spectrum from the usual trolls, amateurs with their third wave, "smart" long term investors, maybe experienced traders with their models, "experts" with their paid subscription. Judging by the comments everybody joined the herd and the herd gone mad:) Everybody shouting in my face idiot you are wrong:). I have not seen such level of mass stupidity, at least not on my blog. Good luck to all of you, you will gone need it and we will see at 2200 next year.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - strange this last wave 5 looks like impulse with zig-zags... wave 3 is extended 2,618 usually in this case you have 5=1, but the market wants to extend to the max obviously and the trend line was hit one more time with 5=1,618x1. For the rest of the year support and the trend line should be tested and a bounce into year end.
The only wave to extend even more is to count this ii and now iii/5.... not my preferred count.


Intermediate term - exhaustion gap, I want be surprised to see open lower next week. MACD/RSI 5 waves higher too and divergence. For me this is the top of c/B.


Long term - the top of wave B, expect sell off to begin and to continue into Q2.2020. It will complete the correction which begun in January 2018.


MARKET BREADTH INDICATORS
Market Breadth Indicators - somewhat improved, but nothing more than making room to absorb the coming decline. Market breadth has not been reset so that the trend can re-energize for another long lasting rally, market breadth is still showing long term divergence.
McClellan Oscillator - above zero, interesting it was negative on Friday.
McClellan Summation Index - buy signal with lower highs.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - buy signal.
Fear Indicator VIX - higher low and divergence.
Advance-Decline Issues - lower high and divergence.


HURST CYCLES
Daily/trading cycle - it is up, the price is above MA10 and RSI above MA18 and above the respective trend lines.



Week 11 or 17 for the 20 week cycle.
I have changed the chart - this one is more trading oriented with MA10 and RSI like the one above and gives better perspective for timing - tops and bottoms. My biggest mistake this year was timing not EW and I am looking how to improve it.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At the same time on both charts daily and weekly we have finished sell setup and on both charts 9-13-9 sequence. Usually when such thing appears on both charts you have a strong signal.... confirming the EW pattern a high, fascinating:)

92 comments:

  1. Well summed up analysis Krasi. Markets is a patience game, people here forget that and ask for instant results at exact levels.

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    1. Like the market is static, you do not have new information every day and I have to forecast the exact path for exaggerated corrective wave one year in advance.... that is not the way it works, but this does not count I am wrong and EW does not work.

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  2. Krasi I dont understand why you expect a top, but in the market breadth indicators you say buy signal.
    Shouldn't it be sell signal?

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    1. EW is forward looking tool and it signals completed pattern and important top. That is why I expect a top.
      All other indicators including market breadth are price derivative and are lagging. After 3 months higher you can not expect something different than pointing higher which is buy signal.

      For trading purpose you wait for your EW count to be confirmed or market breadth/the indicators to turn lower with sell signal, which is one and the same.
      See the first chart - drop to support, failed attempt for new high, brake below support - then you have your confirmed sell signal.

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  3. Non sono d'accordo con il tuo conteggio https://www.tradingview.com/x/733aK0Os/

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    1. Seriously? This count is a joke.... 4 year cycle low mid 2020.

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    2. certo a meta del 2020 si potrebbe avere un minimo tutto e possibile , ma il tuo EW E' COMPLETAMENTE SBAGLIATO , PRIMA cosa la b e' piu' alta della 3 ... cmq e cosa rara che la b supera un onda primaria , ma puo' succedere .... ma veramente credi che questo movimento dai minimi da 2300 fino ad oggi sia Un a-b-c di B ??? DAI mi stai facendo capire he tu non Capisci niente di EW ... mi stai deludendo , non per il fatto che non sono d'accordo con te , ma perche' continui ad offendermi ,

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    3. You need a lot of practice to learn to count waves.... this above is amateurs work.
      You are in the group amateurs with third wave sorry.

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    4. ripeto una B IRREGOLARE e' rara , ma puo' succedere e potresti avere ragione , ma ripeto questo abc di b da 2300 ad oggi non lo vedo , mi sembra piu' una 3 e ti ho fatto lo schema , non ha niente di abc... ma lo puo' essere ed essere una B ... questa e una mia opinione , se poi vuoi continuare ad offendere, fallo pure .... poi e vero sono un dilettante , ma e vero che lo sei anche tu ... che sei troppo sicuro e non hai un altro conteggio alternativo

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  4. Yes, we are at a major top. I am still looking to buy some stocks that are setting up like PCG and some BIO stocks CLVS. Do you think these will be affected by the market drop? It doesn't look like they've been following the broader market and they seem to be doing their own thing.

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    1. I am skeptical... very speculative stocks, too risky for me. I think they will be affected too and best case is moving sideways with volatile legs up and down.
      IBB/XBI are not much different sell off to finish the correction.

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  5. On your Jan 2, 2019 post you said, "When it is over another scary decline for 4 year cycle low in late 2019 or Q1.2020."

    You missed late 2019 so what happens if you miss Q1 2020? You have made it very clear it will happen. Would your count just have been completely off? Not trolling honest question. You seem so sure of yourself and have dismissed the trolls as idiots. How do we know it's not a 3? Thanks.

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    1. What happened is this B wave extended in time and price, the 4 year low pushed further one quarter to Q2.2020 and price to higher Fibo extension instead of the usual 90%-100% to 138%.
      I can forecast the usual pattern - for flat is a-b-c to the previous highs(90%-100% retracement) and wrote this early 2019 multi month rally higher to 2870-2900.
      You can not predict extension one year in advance, you can adjust when you see it is getting bigger. In August September after sideways move discussing for 2 months where the 40w cycle low is and c/B or y higher, which we saw now.

      Why I am so sure - because the pattern has not changed. It is the same expected corrective a-b-c just bigger nothing more. If you look other indexes like NYSE,Europe,Japan you will see the pattern from Jan.2018 crystal clear and the B wave retracing the usual 100%. SP500 is not any different it is just exaggerated B wave to higher Fibo extension and convinced everybody that it is something different... well it is not.
      Plus I checked different shares and I do not see such supporting third wave... many of them(MSFT,DIS) have not even started the correction, they are just completing the third wave from 2009.

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    2. How high can the fib extension go before it becomes invalid? 138? Thanks.

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    3. The Fibo levels for a flat are 90%-100% / 123% / 138%
      There is no other extensions for this pattern, either there is a top or not.
      NYSE is around 100% , DJI around 123% , SP500 around 138%.

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  6. I hope to see increases even if it is only for being so cool and so contemptuous.

    S&P was going to fall from 2700 in C, and has risen 20-30%.
    You are so dumb that if you now fall after climbing so much, you will think you are right.

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  7. What do you mean with mcclellan was negative on Friday?

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  8. People should be respectful to others. This is free blog... If you can't appreciate any body...Then at least you should keep your big mouth shut.... Krasi keep up your good work ....

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  9. I think your 40w cycle top of 22 april is not right. I think it is 15-22 of July.
    Make the count of the 20 week cycle from october 2018.
    There is one that does not fit. Then this 40w top that you expect now is only 20w.
    Still missing another 20w cycle top for April and 40 weeks, 18 months and 4 years in April too

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    1. I think this top for April can be wave 2 of C, or b/C. It is not necessary that it makes new highs above this month.

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    2. Other option is that this is only b/B

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    3. Both of you... Please, can you upload your wave charts...

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    4. When I explained the cycle guys that cycles are not different than EW they did not believed me:) With cycles you can build models and with EW not was the answer:))))
      And here we are with third different count where the 4 year cycle highs is:) To be fair Hurst theory says different phases(cycles) are synchronized at bottoms and highs occur at different time that is why the tops are usually a process and not like the bottoms event. Short said you do not make cycle analysis of highs.

      That is too late for me I think this is the 4 year cycle high.

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  10. Krasi, could we be in a wave 4 triangle: Dec'18 wave A, currently completing wave B, and wave C will not go lower than Dec'18 low?

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  11. I started following this site from late 2017, trolls make most noise close to market tops.

    Like i said in my earlier post, there are no instant results at exact price points. Markets is a patience game, playing reversals is more so.

    Asking legit qns to clarify is fine, but no need to be abusive or disrespectful. If you think this forum isn't useful please leave.

    Keep writing Krasi!


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  12. Hi Krasi, I like most analysis that involves Hurst cycles. Just wondering what platform and indicator you're using :-)

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    1. I do not use anything special. Their is software called Sentient Trader if you really want to trade using Hurst cycles with everything you need.... but it is not for free.

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    2. Thanks for that. Yep, Sentient Trader is what I use :-)

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    3. I do not make deep dive into cycles, FLD trading this A-B-C-D-E-F-G-H interaction etc.
      I just look when I should expect important low/high and how the pattern(EW) looks like.

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  13. Krasi, about hurst cycles, I don't know how to explain it in English, I've made this chart.

    https://prnt.sc/qenle5

    If it's your count then there is a very long 20 week cycle between October 2018 and April 2019 (32 weeks), I think it is too long.
    Also, if we put the 20 week cycle in November 2018 or March 2019, then the low cycles would have to be moved and they don't fit

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  14. So I think this count is better

    https://prnt.sc/qenpdj

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    1. This takes into account how to make perfect looking high to high count which is not part of the theory in the first place(tops are not synchronized) and ignores the pattern and low to low count which is the important one.

      With this count There will be no 4 year cycle low in 2020 it was in late 2018, I do not know what pattern this will be, the 4 year cycle high-to-high will be 5 years long.... a little to much for me.
      Sometimes one cycle is so dominant that you do not see the shorter cycles - examples are high-to-high Sep.2018 to Mai.2019 or bottom-to-bottom Apr.2018 to Dec.2018. Trying to count the 20w cycle is useless it is just pasting it somewhere.

      I do not have perfect answer where the boundary between two cycles is. The best way I know is this cross of MA10 - it is not put just like that on the cycle charts:) . The message is different move of the same degree has begun. Many indexes and MA10 weekly say correction begun in May there begins the next cycle for me.

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  15. If the 4 year cycle high is in March then the 4 year cycle low may be in June-July, 3-4 months of decline in wave C

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    1. 3-4 months is too short. There is shares which are finishing their third wave from 2009 like MSFT,DIS and others.
      The correction should take much longer, even longer than 6 months.
      My theory is the 4 year cycle low in Q2 will be tested around November with the first 20w cycle from the next 4 year cycle.

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    2. I dont understand, what do you mean?, wave 5 of C will truncated? and the wave 3 of C will be which makes lows for the 4 years cycle low?

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    3. I mean the correction should take time. Cycles say the low should be late Q2, but I think the market will start something stronger to the upside after the elections most likely ii/1/V.

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  16. Krasi, we have today one more high

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    1. Look at the 10min chart do you see something missing.

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  17. I took a short on NQ and CL today on the bounces. Do you think the low volatility could enable a surprise to the downside over the holiday weeks? Or is it more likely to see something after Jan 1? Curious what your thoughts are. Thanks You Krasi

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    1. I think topping is needed like shown on the first chart and something more serious to the downside in January.

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  18. Thanks as always Krasi

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  19. Santa Claus Rally starts today

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  20. One more high, it looks like wave 3, they don't stop print

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  21. There is no signs of poulbac

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  22. How many more highs do you expect Krasi?

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  23. They are going to print till February

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  24. Yup, think this is going to drift up for weeks

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  25. I will repeat myself look at the 10 min chart from 19th and 24th and count to five instead of the trying to explain 0,3% with the FED.

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  26. Why does it keep going up though?

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    1. Because the count is wrong.

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    2. Unknown - because the pattern has to be finished.

      xyz - it is normal for a beginner to not make a difference between third wave and c wave... you will learn it.

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    3. okie dokie. see u at 3300.

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  27. So I guess I don't understand Krasi. Are you still short with your triple leveraged short position? How much of your money do you bet on this trade? According to what I read about risk management, it suggest betting no more than 5% of your entire capital on a single trade. what percentage do you bet per trade? When you say you shorted 1/3, does that mean you shorted 1/3 of your entire capital or just 1/3 of 5%? Also can you explain to me how betting such small amounts you can out pace someone who is fully invested all the time especially this year where S&P is up 30%? Would that mean that trading simply 5% of your capital, you would need to make 630% return on that 5% trade over the year? How would you accomplish such a return when half of the time, you are wrong.

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    1. Some one is up 30% when the trade is closed. The so called smart long term investors fully invested will not close anything and ride for the second time 25%-30% lower.... because they are smart:)
      The correction begun in January 2018 by the time it is over and fully retraces the same smart investors will make zero profit for 3,5-4 years.
      How difficult is to beat the so called smart fully invested in indexes investors? - not so much.
      Do you get it now?

      No one can beat the index is a fairy-tail, many traders can make more profits. Those with billions have a problem - they can not move them. I can be in an out any time at any price and I do not even need to trade the whole move to beat the index and the so called smart investors. Average 10-15% per year are not a problem for a good trader.

      I start very small because there is nothing it is obvious, but we are close and with the time when the move develops and I see reversal I add more and more. When I see important low confirmed and a few months higher/lower expected I have no problem to invest much more than 5% half and more.

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    2. That's not true. I know plenty of people who sold after 20% on their money. Most people can't hold out after around a 20% return. I know I sold too early but will take 23%. Simple saying everyone will lose their 30% to fit your narrative is dishonest.

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    3. Fix your narrative - than they are traders, not fully invested and has not beat the index either.
      My forecast multi month rally to around 2900. Important low 18 month cycle low so much more can be invested. Take only half of this move with triple ETF and you make more than 20%.
      So 3/4 of the time wrong and trading only two months between Dec.2018-May.2019 and there you have it.

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  28. wait it looks like 5 waves are complete. No wait one more high looks better. No this is C no its B no its 3. Do you guys see the problem of relying on sound investment decision on such nonsense? Use levels. If it breaks out, buy. If it does not short. There are sound trading strategies that can be tested. Or simply index. But use something with some validity. There is a reason why the inventor of elliot wave theory died broke.

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    1. Why do you think I switched the cycle charts with such for trading? - Because I am tired listening this bullshit. If some one is interested in trading and wants to ignore EW should go to chart 4 and skip the others. Idiot proof and I bet much better than your break outs.

      Concerning EW I listen the same crap over and over. When you can not use or understand EW is your problem not mine. Be so kind do not comment something what you do not understand and let me use what I want.

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    2. People can't understand because you don't understand. You are saying one thing but the opposite is happening. Sounds like you don't understand. Not trying to be rude but your not really giving people a reason not to question it.

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    3. Again chart 4 and skip the others. It is exactly for uselesss discussions like this.

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  29. It looks like wave 3 of 3 of 5

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    1. Futures look like iii/v/5/c/B, EU50 finished the impulse I have shown last week and reversing

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  30. Is it unusual to have such prolonged extensions for corrective waves?

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    1. The first leg was 11 months this is 12 months so it is not exactly prolonged(time).
      Price... NDX is extended and SP500 because of the same tech stocks. It is not the usual behavior, but it is not exceptional either.
      If you see NYSE,DAX,NIKKEI and many others there is simple flat no extensions, nothing prolonged. Everybody focused on SP500 and the "strength" not seeing it for what is it - corrective a-b-c/B like any other index. Just look at the EW expert above:)

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  31. Krasi, there is one thing that bothers me and it is the market breadth, look at the indicators on 4 October 2018 and look at them today. They would have to deteriorate more to think in big moves down

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    1. I see divergences with the previous move up (EW wave a) and short term most likely we should see topping and not sudden reversal... like testing the top before really get interesting to do downside.

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  32. You guys can all act like a bunch of EW experts but no where in your count were you talking about 3250. I only heard 3200-3300 a few places. Those even have odds of higher. So smart money or not, you guys were not close to this number.

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    1. After the fact everybody is genius.... I will ask how many of them were predicting 3200 in Dec.2018/Jan.2019.... but jumping on me because I was predicting around 2900 and I am so wrong.

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    2. I know a few after the late-December low at SPX 2347. They had high probability Intermediate wave I of Primary III bull market was underway. This was in Jan 2019 with a 80% probability. Unfortunately you have said this count is wrong. Doesn't look wrong now. I think this is the count certain people have been warning this forum about. It was dismissed by you as beginners, trolls and even idiots. I'm not sure why.

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    3. All this persons you are describing do not care about EW in the first place. For them EW is useless.
      This count is wrong and it looks exactly so wrong as before. All we have is a-b-c higher. There is no third waves primary waves etc.
      From Dec.2018 the first part of the move is not an impulse it is a corrective wave well visible on many indexes.
      Long sideways move retracing 23%-38% is not wave two it is wave b.

      It is easier strong 1-2-3 hey it is so simple... but it is wrong.
      Some are starting to understand it... I know two guys which changed their counts from impulse to something different.

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    4. Ok, thx for explaining

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  33. I personally see the market stalling for a few week to digest this move, but the small divergences, strong internals e no signs of distress in the credit markets all indicate that any correction will be mild. The only thing that worries me in the short term is that sentiment is way too bullish in many surveys.
    At this point I think Krasi's primary long term count is very unlikely; once we get a decent pull back I think we'll see a correction in 3 waves, with a nasty little C down to 2880 at most.. something fast and difficult to catch, but bad enough to reset sentiment before we start a thousand points run up to potentially end the higher degree bull market.
    Valuations (which are ignored by the TA crowd in general but cannot be dismissed as they get the big money moving) also support it: rounds of revisions up in forward earnings estimates are just around the corner IMHO. If we see that number go up even just a few % points to $190.. it would make it for a 15x multiple at 2880 of the index.
    That has proven to be a good entry point for the LT and it's not at all high with yields were they are today.

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    1. Different opinion with arguments without accusation... some fresh air:) Thank you!
      I am not fundamental guy, I just watch patterns and I see something much worse...

      Here is why EW is very useful tool - if we see only three wave corrective move above the October low as you say it is bullish, if we see impulse or something bigger it is very bearish.
      Simple no need even to use EW for trading in the first place.

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  34. Thanks Krasi! The only truly bearish thing I see in charts is that a simple RSI 14 on monthly SPX charts shows really bad divergences (the only truly pronounced divergences I see in trend strength indicators). That is one element that makes me still consider your LT count, but I think the overall weight of the evidence still points to IV having completed a year ago (that is me trying to talk EW!).

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    1. January/February we should see a correction and it will show us what is going on.
      A trader should be flexible and be ready to change his mind at any moment if he sees new information. If the correction disappoints I will change my mind.

      I see this LT pattern every where and the only indices which show strength are SP500/NDX/SOX - it is all about tech stocks. I think this strength is just a disguise for the same and distorts the indicators.
      Wave 4 should retrace 38% time and/or price. Finished w4 in Dec.2018 is too shallow both price and time.
      w3 is 6 years long - 1y is 17% retracement, 2,5y 41% retracement.
      38% of w3 is 2200, C=1,618xA for expanded flat is 2200.

      Maybe too much TA:), but do you see the cluster of Fibo measurements price and time...
      Anyway lets see what happens in the next two months.

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    2. I've been watching the monthly RSI too, and I see it as being even more bearish than the divergence with the Jan and Oct 2018 highs. The correction last December broke the long-term RSI trendline and the rally since has been a year long back test that looks about to fail (similar to 2000 and 2007) -- https://imgur.com/sM6H3Vs

      I'm actually failing to see how this isn't a terminal final wave of the current bull market and wondering how it can continue up towards 4000 after whatever correction is coming soon takes place? But that's not a decision for now and it'll be interesting to see how the indicators look in six months to decide about eventually going long again...

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    3. When you have long lasting move with many RSI lows you can skip the first one.
      For example skip 1974 and you can connect all the other 6 RSI lows.
      The same you can do for 2009 and connect the 4 lows with horizontal line.
      I will make a guess with the C wave RSI will drop around 50 to this horizontal line and bottom for a few months signaling continuation higher for the bull market.

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  35. bravo Krasi, also short NQ and CL. CL news was very bullish today with almost no reaction - good news for the bears IMO

    Enjoy!

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    1. CL really ugly corrective move lasting 12 weeks already, hopping to see a plunge lower soon:)

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  36. wondering what you think of the MJ sector (or at least the leader (CGC) at this time? I feel it hit a bottom but I'm not as fluent on EW as you are. Your thoughts if you get a chance on CGC?

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    1. Watch this video - https://www.youtube.com/watch?v=PieQkxrGUdE
      This guys are really good...

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    2. Many thanks, subscribed to him

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  37. We are in wave 3. Wave 4 will pull back to around 3100. Then 5 to 3700. I'm sure from a structural standpoint you are confused. It's a honest mistake. Takes years to understand. In the coming months price will show you the way. Hopefully by then you guys aren't broke :) Best of luck.

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    1. You are seriously confused... can you count Elliott waves? - I seriously doubt it. Takes years to practice and understand. Do not worry in the next months price will show you the path.

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  38. The question is can you count? You are almost 400 points off. Bwahaha. Even Avi is only 100 something off.

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    1. Do not worry you will be proven off a lot - with wrong count.

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  39. Oops actually Avi had 3011. Sorry.

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  40. Oops actually Avi had 3011. Sorry.

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