May 23, 2020

Weekly preview

One day fireworks and four days nothing this is not trending move just part of a bigger pattern. The problem is the pattern is still a guess - different indexes look different, cash and futures are not in sync, it is a mess at the moment. Waiting to see completed pattern.
Overall we had daily cycle low and now the next daily cycle made a higher high as expected. At least cycles keep us on the right side:) Now it is higher until this daily cycle makes a top and reverses lower. If I am right it will be left translated and fail to rally turning lower into June for the 4y cycle low.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - you can count impulse and reversal(red), but for some indexes this does not work. I am skeptical about this, when you are trying to find a pattern it is just not there. When a pattern is completed you just see it.
With continuation higher there is two options - b/B for a flat or z wave... or even 3/C of a big ED. Guessing continues and waiting patiently for the moment.
If I have to choose it is wave z to around 3050.


Intermediate term - the indicators look ripe for reversal RSI/MACD with divergence, MA200 almost tested, price trapped between MA50 and MA200. Waiting to see what happens next.


Long term - the same now the indicators have the right look for reversal - the histogram moved above zero and RSI touched the trend line what I wrote 2-3 weeks ago.
Resistance/MA50/62% is being tested, now we should see a leg lower to complete the correction.


MARKET BREADTH INDICATORS
Market Breadth Indicators - first signs for a trouble, the indicators are not following higher and some with divergences.
McClellan Oscillator - multiple short term divergences.
McClellan Summation Index - possible double top.
Weekly Stochastic of the Summation Index - turning lower, possible sell signal.
Bullish Percentage - double divergence.
Percent of Stocks above MA50 - strength above 75.
Fear Indicator VIX - divergence higher low.
Advance-Decline Issues - another lower high and divergence, weak pointing lower.


HURST CYCLES
Daily(trading) cycle - the signal is still buy, but the price and RSI are not showing a lot of strength. This is the expectations from the beginning that this daily cycle will fail as left translated.
I want to pay attention to something, which is very helpful for trading - every 7-10 trading days their some kind of interaction between price and M10, which could be just 1-2 sideways days for MA10 to catch up or test of the MA10 or close below it(should not be for more than a day)
I think this corresponds to 10 day Hurst cycle lasting 7-9 trading days. In the begging or the middle of the longer cycles this are good entry points to add in the direction of the trend.
The current daily cycles illustrates this very good. I see 4 such cycles for the previous daily cycle and now we have the first one for the current daily cycle. Ideally we should see down on Tuesday to touch MA10 and turn higher for a few more days.


Hurst cycles - this sharp move higher is from cycle low I doubt it is 80d low too short for that, most likely it is 40d low and the next 40d cycle running.


Week 16 for the 20w cycle. It is starting to take too long, if we do not see the high next week considering alternate option - March 20w low this corresponds to A-B pattern(green first chart)... again March is not 40w low there is no 40w cycle with length 25 weeks.

May 16, 2020

Weekly preview

Finally we have a move lower, this trading cycle was missing at least one push lower into the time frame for a daily cycle low.
The pattern is again not 100% clear. At the moment I think we will see another 2-3 days lower for daily cycle low and final move up to complete the rally from late March.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the move up looks corrective, the leader NDX is the weakest so I think we should see another low and final move up. Best guess w-x-y with y as a flat. Some see A-B-C or 1-2 I am not convinced the pattern is so bullish.


Intermediate term - RSI broke the trend line, which is the first sign that the move up is topping. If the market is topping next we should see test of the broken trend line ideally with lower high.
The big picture - the price is close to MA200 and it looks tired. Even if I am wrong it needs to cool off before breaking above MA200. So we should see something lower even if it is only corrective.


Long term - Resistance/MA50/62% is being tested, after that we should see a leg lower to complete the correction.


MARKET BREADTH INDICATORS
Market Breadth Indicators - sell signals, but probably we will see one final weak push higher. Despite the strong move up from the March low, indicators like Bullish Percentage,Percent of Stocks above MA50,Advance-Decline Issues are behaving like this is corrective leg. This is not good news for the market - according this indicators we should see lower low.
McClellan Oscillator - weak, does not buying this two days rally.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - reached overbought level, trying to turn lower.
Bullish Percentage - very weak, obviously only a few stocks make the index look strong.
Percent of Stocks above MA50 - bearish behavior staying below 75, probably divergence when we see stocks higher.
Fear Indicator VIX - second leg higher expected with lower high.
Advance-Decline Issues - weak, continues with lower highs.


HURST CYCLES
Daily(trading) cycle - sell signal, price is testing MA10, RSI below MA18 - nothing to suggest reversal higher. Now it is in the time window for a low and it is right translated so we should see a low soon and a rally higher.


Hurst cycles - 40d cycle low probably early May. I am watching my trading cycle above and think about the cycle theory later.


Week 15 for the 20w cycle. If my count is right we should see 20w cycle high soon and sharp turn lower.

May 9, 2020

Weekly preview

No bearish price action as expected, but even more confusion after this week. The short term pattern is now more unclear - maybe triangle or flat. Cycles possible 40d low on Monday right on schedule on day 28. I can only wait and guess. I still think that we are seeing topping and there is one final sell off for important low.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I have shown that the move lower is corrective, the move up looks like zig-zag too... different combinations are possible so I am just waiting with the labeling. Possibilities which make sense are triangle and flat b, or some ED - just guessing at the moment.


Intermediate term - the index should spend some time between EMA50 and MA200, but all this looks like topping to me before the next leg lower begins.


Long term - another 1-2 weeks for this move up will look good for RSI to reach the trend line and the histogram to reach zero or slightly above it. Resistance/MA50/62% is being tested, after that we should see a leg lower to complete the pattern.


MARKET BREADTH INDICATORS
Market Breadth Indicators - look tired and stretched higher, but there is no signs of reversal or sell signal.
McClellan Oscillator - short term double divergence.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - short term divergence and oscillating around 70.
Percent of Stocks above MA50 - again at 75.
Fear Indicator VIX - elevated levels, we should see one more decline for the indexes and VIX with divergence for important low.
Advance-Decline Issues - still lower highs, overbought levels have not been reached... there is no a broad based strength.


HURST CYCLES
Daily(trading) cycle - the weak point of this system is sideways patterns like triangle or flat. Price oscillating around MA10 and RSI about MA18 so I will not be surprised if some of this patterns is running. But we knew not to follow the sell signal, which is valuable information too.
Now the signal is buy, but I do not think it should be followed too late in the cycle for me. It is not clear if the same one is still running or a new one has begun. Currently day 33, usually the length is between 35-45 days. It will look better if next week we see some kind of a low.


Hurst cycles - there is probable 40d low on Monday exactly at day 28, if not we should see it next week. I can be sure only in hindsight.


Week 14 for the 20w cycle. Expecting a high, probably in 2 weeks, for the 20w cycle and final sell off.

May 2, 2020

Weekly preview

Fake rally into FOMC and red close for the week, but enough to mess up the pattern. On Internet I see two camps either finished impulse up or corrective move wxyxz. Those with something else are minority.
We have right translated cycle so the next one should make higher high. Market breadth needs time - it it just starting to show weakness not to mention topping/divergences. That is why I am looking for a pattern with one more high. The problem it is a guess at the moment.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - a few guesses which are not very different just the labeling. As long as the price stays above 2805 there is a chance for an ED(a-b-c) the other options are wxy or wxyxz.
Some are counting impulse wave 1 or A... it does not feel right for me. Below 2730 and I am wrong, maybe thi time the majority will be right:).


Intermediate term - 62% retracement and resistance(highs from 2018 and 2019) reached, now pullback is running. As long as it stays above the 50% retracement level a-b-c with ED looks good. As long as it stays above MA50 wxy(xz) is ok. Below this levels and something else is going on.


Long term - another 2-3 weeks higher will look good for RSI to reach the trend line and the histogram to reach zero or slightly above it.
Nothing new - resistance/MA50/62% is tested after that we should see a leg lower to complete the pattern.


MARKET BREADTH INDICATORS
Market Breadth Indicators - some weakness, but no strong sell signal.
McClellan Oscillator - divergence and heading lower.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - divergence and turned lower.
Percent of Stocks above MA50 - reached the 75 level and turned lower.
Fear Indicator VIX - elevated levels, we should see one more decline for the indexes and VIX with divergence.
Advance-Decline Issues - broke the trend line, but still lower highs.


HURST CYCLES
Daily(trading) cycle - the signals are that this cycle is heading lower into cycle low - break below the trend line, the price below MA10, the RSI below MA18. At day 28 we have right translated cycle so the next one should make higher high.
The signal is sell, but with right translated cycle it is expected to last only a few days.


Hurst cycles - expecting 40day cycle low and final high for the 20w cycle.


Week 13 for the 20w cycle. Expecting a high for the 20w cycle and final sell off.

Apr 25, 2020

Weekly preview

It seems my suspicion that the move up will take more time is getting confirmed. I was expecting a little bit more action to the downside for this corrective move lower, but now we know it is corrective and another up move should follow before we see something serious to the downside.
If you look closely other indexes like NYSE,RUT,DAX,XLF you will see that the correction begun earlier 9th or 14th of March and it is sideways move so far. This is not a convincing break lower from the wedge - so the conclusion is we have a corrective move even for weak indexes like RUT.

The big picture - I am waiting to see important cycle low later and I do not believe the correction(which begun in 2018) is over. The caveat is the corrective pattern could be completed with higher low.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the wedge breaking with sideways move, which means it is not very likely to see it retraced rather forming a channel.
You can start counting from 14th flat and now x or from 17th and now b - it does not matter I think we should see at least one more move lower before the correction is completed.


Intermediate term - around the low the forecast was to see minimum 50% retracement with 2 gaps closed and it is likely to see MA200 tested with the third gap closed. We have the minimum and with corrective looking move so far the odds are rising, for the second part of the forecast coming true.


Long term - nothing new, the possible patterns bellow. Statistically the red one is the most likely.


MARKET BREADTH INDICATORS
Market Breadth Indicators - taking a breath from the huge run up, for some indicators to very overbought levels.
McClellan Oscillator - very overbought level hit, several lower highs, it is time to see it below zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - below 70, retracing after very overbought level.
Percent of Stocks above MA50 - nothing interesting, above 25.
Fear Indicator VIX - still too high, not buying this rally. I want to see divergence, before important low for the indexes.
Advance-Decline Issues - heading lower around the zero line. Still respecting the trend line connecting the highs so no signs of reversal.


HURST CYCLES
Daily(trading) cycle - technically buy, but this time I think the trigger should be ignored - the context(waves,cycles,indicators) does not confirm it.
Such one day closes below MA10 occur some times, but RSI bounced from MA and did not close below it. On the other side price is testing the broken trend line. Nothing convincing in both directions.


Hurst cycles - RSI says this leg up is over and move of the same degree lower is running. I think the indexes are heading into 40d/5w cycle low.


Week 12 for the 20w cycle. I suspect we have 5w high and now heading lower into 5w low.

Apr 18, 2020

Weekly preview

Now we have two legs higher with the same size hitting resistance and testing MA50 daily. The pattern looks like a zigzag with a wedge shape. Typical outcome with this setup is at least pullback lower even if there is more to the upside.

I have the feeling the bigger pattern is more complicated than most expect, not so simple like the indexes will move much lower. NDX retraced more than 62% which means the pattern from the top in February is not a simple zig-zag and much lower is not assured fact.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see zig-zag with wedge shape so next we should see something lower. The wedge in 2019 did not end well, big portion of the wedge lower is retraced, lets see what happens with this one:) Waiting for the move up to be completed then I expect at least 50% retracement to support and closing the gaps.


Intermediate term - the second gap and MA50 tested, now I expect to see at least a pullback. I have the suspicion this is another x wave... the implication is there is no need to see lower low for complete pattern.


Long term - waiting to see how the pattern will be completed. I can only guess now... statistically the red one is most common
- most bullish option we saw the low(green) - what I miss is to see impulse higher...
- most common corrective pattern is zig-zag(red).
- triangle(yellow) is an option too, but it does not work for all indexes.


MARKET BREADTH INDICATORS
Market Breadth Indicators - showing strength, but I am expecting the real buy signal after divergences.
McClellan Oscillator - short term divergence.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - short term divergence.
Percent of Stocks above MA50 - now above 25.
Fear Indicator VIX - still too high not buying this rally. I am waiting for divergence.
Advance-Decline Issues - still below the trend line connecting the highs and has not reached overbought level.


HURST CYCLES
Daily(trading) cycle - buy signal, but day 41 high-to-high. It is mature so not the time to chase it higher.


Hurst cycles - high-to-high we should see a top according to the sine wave and it is possible to be 20w high. Low-to-low I was expecting pullback for 20d low, which played out as sideways move and now the next 20d cycle is running. I expect to see similar M pattern like in Jan/Feb with the 20w cycle - right translated cycle the next one making slightly higher high and turning lower. So topping next week and decline into 40d cycle low.
The 20d lows are not so clear, most likely the 40d cycle is dominant and the sine wave follows slightly shorter 40d cycle.


Week 11 for the 20w cycle. Heading into 20w cycle high after that we should see a decline into 20w cycle low.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The same price action like on the way lower - failed setup meaning no impulse followed by completed setup with histogram divergence.

Apr 11, 2020

Weekly preview

I think we have the expected a-b-c with the second leg higher this week.... and again it is developing very fast. I see two options the low comes one month earlier in May or this zig-zag is part of a bigger pattern for B. The second option feels better, but I can not predict it for sure in advance.
Short term I can only guess until we see more price action..... currently I think we will see a decline for 20d cycle low and one more high for 20w cycle high.

Here we go again - suddenly the experts bullish again - V-shape recovery, Avi Gilburt with impulse again one more chance before 4500:)))), the cycle guys with 20w or 40w low.... on the other side the bears with 1-2 and now 3 starting or at least much lower. I am the outcast again expecting something in the middle:)


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - wave a hit 38% retracement and c 50%. Now we should see something lower. If we see impulse lower or more than 62% from c retraced(the red line) then for sure this leg up is over. The bullish case I can see is X wave and another zig-zag up(the green channel up). Neutral scenarios are bigger zig-zag lower for a flat or triangle. The bearish scenario is wave B finished and C to new lows begin.


Intermediate term - the minimum target 50% retracement has been reached. With a zig-zag there is a few possible options described above. We can only guess until we see the price action for another week or two. I think this move up should take more time so the green one or alternate the yellow scenario.


Long term - similar to the daily chart we have to wait for a while for the pattern to be revealed. No need to guess, I am just waiting patiently for late May/June to see how the situation looks like.


MARKET BREADTH INDICATORS
Market Breadth Indicators - some are showing extreme overbought levels which usually means strength, but I think it is early to talk about strong buy signal. More likely it is caused by extreme depressed levels before that.
McClellan Oscillator - extreme overbought.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - extreme levels, buy signal.
Percent of Stocks above MA50 - waking up.
Fear Indicator VIX - expecting to see one more lower high for the VIX before the indexes complete the decline.
Advance-Decline Issues - still below the trend line connecting the highs since 2019 suggesting this should be just counter trend move.


HURST CYCLES
Daily(trading) cycle - buy signal, the price and RSI above the MAs. It was expected for the last two weeks, now it is obvious. From low-to-low we have 35 trading days, now we have 36 trading days high-to-high so do not fall in love with this buy signal.


Hurst cycles - I think wee should see a move lower for 20d cycle low and one more high for the 20w cycle high


Week 10 for the 20w cycle. Now expecting 20w high followed by move lower into the 20w/40w/18m cycle low.
Those who think this is 40w low - this is 100% wrong. The expert David Hickson switched to 20w low - only if we have some triangle.... more likely wrong too, making the same mistake like the EW guys - getting fooled by the amplitude. Cycle analysis is about time and not amplitude. Amplitude changed expanding since 2018, time has not changed.

Apr 4, 2020

Weekly preview

The first calm week. It looks like consolidation after the huge gains last week. The move lower looks corrective to me so the plan is the same - this should be b wave from retracement higher. Ideally this retracement should continue for at least another 2 weeks for 20w cycle high.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - we have flat 38% lower(w), there is no reversal so probably wave x is running... it looks like combination for b wave. Watching 50% Fibo retracement and c wave with the same size higher. This pattern fits well with time another week lower for 20 day cycle low and another week higher for 20w high. If it so bad we will see continuation lower red.


Intermediate term - nothing new, watching for gap close and test of MA200.


Long term - as long as the retracement stays below 62% the possible scenarios I see are:
- A-B-C for a huge expanded flat - this could be the price low, but it does not feel right as a pattern.
- W-X-Y - 2019 was X wave, what follows is another corrective pattern. Excluding flat - repeating March two more times looks crazy, so what is left is zig-zag(red) and triangle(yellow).


MARKET BREADTH INDICATORS
Market Breadth Indicators - trying to turn up with buy signals, but this is not a strong signal. The indicators are preparing for a divergences later.
McClellan Oscillator - around the zero line.
McClellan Summation Index - turned up with buy signal.
Weekly Stochastic of the Summation Index - turning up.
Bullish Percentage - wild swings.
Percent of Stocks above MA50 - trying to turn up, it will take time MA50 is far away.
Fear Indicator VIX - elevated levels. I think it should drop more before we see another surge higher.
Advance-Decline Issues - in the middle of the range around zero.


HURST CYCLES
Daily(trading) cycle - the price is trying to bounce from MA10 and brake above the second trend line, RSI will probably test the MA and the lower trend line before breaking higher. The trigger is buy, but as I said last week this should be just corrective move with one more leg up.


Hurst cycles - we saw 20 cycle high with length 16 days last week now we should see 20d cycle low next week. Ideally we should see two 20d cycles higher and the top of the second one should be the 20w cycle high.


Week 8 for the 20 week cycle. The 10w low looks confirmed, we should see a few weeks higher for 20w high and move lower into the 20w cycle low.

Mar 28, 2020

Weekly preview

One more low completed the pattern and retracement is running. MCO and RSI with double divergences and those expecting much lower are disappointed as expected.

Many are trying to count this as w4... this weekly candle does not look like the weakest wave to me. At the moment I think we have correction higher, which should take time another 3-4 weeks. For the big picture I have a suspicion that we have a combination this wave up could be X, but for that I want to see 62% retracement exceeded.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see a wedge and a break out higher. RSI broke the trend line and we need a pullback to establish the new trend line.
The move lower counts better as a-b-c and not as an impulse. To the upside - the cash index is not so clear, but the futures are showing impulse so we should see more to the upside after a pullback. It should be some pattern, which takes time. The retracement has just begun so the path shown below is speculation at the moment.
As long as the red line is not crossed this move up is not in danger.


Intermediate term - RSI with double divergence and we have move up. I think it should take another 3-4 weeks for 20w cycle high. 2900 looks like a good target to close the gaps and to test MA200, resistance and 62% retracement.


Long term - some already counting completed correction(expanded flat) other trying to fit impulse lower(the bull market is over). I do not think that it is so simple. In a few weeks we will know more. Some EW thoughts:
- if the correction is over with a flat we should see impulse higher. Than this should be i/1/V... too big too fast for my taste - suspicious.
- the bull market is over - then we should see impulse lower. If this is 1 for five weeks than around the end of the year SP500 will be at 500 - unrealistic. Realistic is "a" and the next one big zig-zag below.
- big zig-zag from Feb.2020 is running and it is so bad - than this is b and should hit 50% retracement and stay below the 62% or zig-zag will be negated. There is no such pattern expanding W-X-Y so suspicious. No, it is not expanding triangle either.
- the retracement takes longer and reaches 62% Fibo level or exceeds it - probably X wave and we have combination flat+X+corrective pattern. For NDX and SP500 big triangle could be an option, but for other indexes it will not work so well.

Too much theory from trading perspective just wait for the important cycle low - higher low or lower low with divergence. This will be the low risk trade.


MARKET BREADTH INDICATORS
Market Breadth Indicators - some are showing strength so this move up should not be just three days wonder quickly reversed.
McClellan Oscillator - reached slightly overbought level after divergence.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - sell signal, trying to turn up.
Bullish Percentage - sharp move higher, reached 70 with a buy signal.
Percent of Stocks above MA50 - trying to turn up, it will take time MA50 is far away.
Fear Indicator VIX - elevated levels. I think it should drop more before we see another surge higher.
Advance-Decline Issues - sharp move up.


HURST CYCLES
Daily(trading) cycle - buy signal was triggered, the price and RSI broke above the MA. The first trend line was broken, probably pullback and break above the second one. The next move lower should be corrective and it is a buy.
Do not forget - this trigger is nothing more than flip switch buy/sell. You have to put it in the context of the price action and the expected price action is corrective higher for a few weeks. If you are not comfortable with that ignore it.
Overall 35 days is a good length for the daily cycle and I think the next one is running.


Hurst cycles - adjusted the sine waves to fit the price action. I think we have 10w cycle low and next we should see several weeks higher for 20w cycle high.


Week 8 for the 20w cycle. Strong move up - most likely we have 10w cycle low.