Feb 15, 2020

Weekly preview

Last week more price action was needed for the pattern to take shape and after this week it looks like ED. For confirmation we should see one more high followed by steep decline below 3300.
If we see move lower without one more higher high than it is the bigger ED which I showed last week in comments.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it looks like diagonal structure, but no overlapping on the cash index. There is overlapping on the futures and other indexes - DJ,NYSE,RUT.
For something bullish we should see only zig-zag above support and MA200. Break below this level and with high probability we have a reversal.

NYSE it looks like ED with overlapping - it makes more sense to see completed ED squeezing marginal higher high so that the big pattern is synchronized across the indexes.


Intermediate term - the fifth wave shown last week is taking the shape of a wedge. This pattern once completed is fully retraced so next target should be support around 3215. If H&S is confirmed target is important support and MA200. The indicators does not suggest something bullish.


Long term - at the top of wave B, next we should see sell off into the end of Q2.2020. It will complete the correction which begun in January 2018. Alternate shorter impulse C for running flat, less likely big ED.


MARKET BREADTH INDICATORS
Market Breadth Indicators - do not follow price higher, weak and divergences.
McClellan Oscillator - slightly above zero with double divergence.
McClellan Summation Index - turned up but very weak below the MA, this is still sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned up with divergence.
Percent of Stocks above MA50 - below 75 with divergence.
Fear Indicator VIX - double divergence, next we should see spike higher.
Advance-Decline Issues - double divergence.


HURST CYCLES
Daily(trading) cycle - the trend line touched two more times, the signal is still buy. With this diagonal pattern and the divergences it could change very rapidly.


Hurst cycles - 10 days higher, we should see a high next week. With RSI double divergence it does not look so bullish.


Week 2 for the last 20 week cycle, making higher highs at week 19 does not make sense plus my indicators are pointing to a 20 week low.

Feb 8, 2020

Weekly preview

I was expecting bounce higher from MA50 daily and deep retracement 62% or more... but this impulse really surprised me. Technically nothing changed - RSI testing the broken trend line with divergence, market breadth with sell signals, cycles tricky if we have 20w cycle low or not. I still think this is an important top and it loks like exhaustion move with this gaps and bearish candle formation at the end of the week. Many indexes has not made higher high which is a red flag and happens around tops - NYSE,RUT,DJT,SOX,EEM,SVXY(volatility).


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it looks like impulse.... at the moment there is no enough price action to confirm it or forecast what happens next, we have to wait.
For something bullish a pullback should stay above 3295-3300, below that it is bearish.


Intermediate term - another possible count impulse higher with really extended third wave to the max 4,236, 5=1 and 4=0,236x3 what you expect in extended wave. The third wave itself has extended first wave which I explained once iii=0,618xi and v=0,38xi. Now we wait for confirmation or not... or maybe this final wave 5 is ED and this is wi, it will fit with cycles 2-3 weeks higher, at least the Fibo levels look perfect:)
The indicators - MACD/RSI broke the trend line from the October low and found support at the trend line from Dec.2018. Now RSI is testing the broken trend line and we have divergences. The indicators look bearish. The move looks like exhaustion with this gaps and bearish candle formation... on DJ it looks really bad like strong reversal.
For those who think the market is bullish any move lower should stay above the red line 38% retracement and support. Below that with high probability the third wave is dead.


Long term - at the top of wave B, next we should see sell off into the end of Q2.2020. It will complete the correction which begun in January 2018. Alternate shorter impulse C for running flat.


MARKET BREADTH INDICATORS
Market Breadth Indicators - some turned up... but I do not see bullish signs most with sell signals and divergences.
McClellan Oscillator - returned above zero after slightly oversold levels and divergence, now turned lower again.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - divergence, this time did not follow the indexes higher.
Percent of Stocks above MA50 - divergence and turned lower.
Fear Indicator VIX - testing the trend line as expected, next we should see spike higher.
Advance-Decline Issues - around zero and testing the broken trend line, next it should plunge lower to oversold levels.


HURST CYCLES
Daily(trading) cycle - we have the next daily cycle the price above MA10... but we have already two right translated cycles in a row so the probability for a third one is low plus as discussed RSI does not look bullish rather bearish. For something bullish we have to see shallow pullback to test MA10 and the trend line. I think the probability to see left translated cycle is very high.
So the signal is buy - if we see shallow pullback testing MA10 and turn high you have long entry point, if we see the price below 3300 we have failed left translated cycle which is bearish.


Hurst cycles SP500 20d sine wave highs - currently it looks like it is turning lower early at day 11 which is bearish. We have already 8x20 cycles so the next 20w cycle should be running.


Now there is two options - 20w low behind us and the next 20w cycle is running or 40w cycle high this week and 20w low in the next 2-3. weeks. We need more information(price action) to confirm which one it is. In the first case we have important high and we should see bigger move lower. In the second case we should see corrective move lower for 2-3 weeks and the price should stay above the 3150-3200 range.
The signs are pointing that we have new 20w cycle running:
- first the index broke below the trend line, RSI broke below MA9 which usually signals new cycle.
- second the daily chart above we had already 8x20 cycles for 20 week cycle high.
- third when you expect a high and you have strong right translated cycle usually the next one is making higher high and reverses for M pattern aka double top.... what we

Feb 1, 2020

Weekly preview

Second bearish weekly candle with market breadth in sell mode... now it is confirmed - the 20 week cycle turned lower and the indices will move lower for a few weeks.
What is much worse on the last day of the month big sell off and we have bearish monthly candle instead of nothingburger - indecision candle. I was watching and expecting such candle, but with only one day left I gave up and the market makes what you expect in the most unexpected way:)


TECHNICAL PICTURE and ELLIOTT WAVES
Another short term pattern from Kris which looks better.

Short term - all possible patterns I see are - impulse with extended fifth wave 5=1to3, zig-zag with a=c for "a" of a bigger zig-zag or diagonal(yellow) if we see a bigger pop up next week. It sounds complicated, but it is not because all three have the same path - final up and down for the pattern to be completed then retracement higher.
Looking the MACD/RSI divergences it is hard to imagine that the move is just starting to accelerate.

Not so complicated AAPL it looks like impulse 1-2-3 and probably H&S top formation.


Intermediate term - TA looks interesting... the market does not start big sell off when it is above MA50 first you see a bounce with lower high or higher high with divergences then a bigger sell off follows and currently MA50 is being tested so we should see a retracement higher.
The indicators MACD/RSI breaking the trend lines from the October low. If we have just small a-b-c for iv/3 the next lower trend line will be tested and the price will turn higher again.
Look at RSI - often when you have fourth wave RSI breaks the trend line which is early warning and moves deeply lower, but stays above 50 - see the circles it happens all the time. If this is small degree wave iv/3 not even 4 why is RSI below 50? Why in the middle of the third wave we have bearish monthly candle? Just asking the bulls, I now the answer there is no third wave in the first place.
I expect bigger decline and it should test the area around support(the previous four peaks), MA200 and 38% retracement.


Long term - wave B should be finished, expect the sell off to continue into Q2.2020. It will complete the correction which begun in January 2018. Alternate scenarios - three waves lower for C triangle or impulse C for running flat.


MARKET BREADTH INDICATORS
Market Breadth Indicators - turned lower with sell signals.
McClellan Oscillator - second slightly oversold level with divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - sell signal.
Fear Indicator VIX - it looks like we have an impulse higher and I think it should test the broken trend line connecting the highs, then we should see big spike higher.
Advance-Decline Issues - heading lower and broke below the trend line connecting all the lows from Dec.2018.


HURST CYCLES
Daily(trading) cycle - the signal is sell. I have paid too much attention to the divergence on the 1h/4h chart and ignored the entry point - the price was rejected four times at MA10.... my mistake. It is not fatal I think we will have another chance. RSI is moving too far too quickly from the trend line and MA18 so it should snap back and this will be another entry point.


Hurst cycles - SP500 20d sine wave. The question is when to expect 20w low? The Hurst guys are counting short half cycle(only 3x20d cycles) and from there another 10 weeks or 4x20d cycles with a low mid-February(red arrow). Full 20w cycle with 8x20d cycles is the first week of March(black arrow). We can only wait and watch how the pattern develops. If I am right that we have B wave the decline should be bigger and take longer or late February/first week of March.


Week 17 for the 20 week cycle, which with high probability turned lower. Based on the high-to-high count which is minimum 40w cycle high I expect to see a bigger decline than most expect.