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.

50 comments:

  1. In the long term chart, wave B has exceeded the 161% of wave A and that is not possible

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  2. Neely in the the chapter 5-35 central considerations, flats(3-3-5) strong b-wave

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    1. Neely says B can be up to 2,618.... Neely is not original EW work, but I will give him a credit and this is the alternate scenario wave C running flat - the weekly chat.
      The pattern is clearly corrective.

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  3. In which page Neely says that wabe B can be up to 261% ?

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    Replies
    1. 11-17 Running flat... I do not like Neely when I see his long term charts how all waves 2 correct higher for ever and he lost me.

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  4. So what happens if it goes past 3400?

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  5. Replies
    1. Important is the pattern not if it is 3400 or 3408 etc.

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    2. I disagree, if you ignore key levels and just focus on the pattern it will keep evolving over time and just support hindsight analysis.

      Perhaps the reason why your timing in Feb 18, Oct 18 worked well. Whereas in trying to predict this "pattern" you have largely been a spectator between 2900-3350. Eventually what goes up must come down some is what now sounds like.

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    3. We are talking about the next 10 points...

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  6. OK. At what point is B no longer valid? If so what could it be? Still in III?

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    Replies
    1. It is no more valid when we see impulse - it should move much higher now because the supposed wave 3 which the bulls see is shorter than wave 1... lets say 3700-3800 then we should see corrective pullback something like 3400-3500 and then higher to something like 4500.

      Delete
  7. Hello Krasi,i agree your AT on US indexes. Talking about commodities do you think It Is time for a rebound of Natural Gas till 2,20 before another down movement towards 1.60?

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    Replies
    1. It looks like a rebound has started... counting waves and cycles is very difficult with NG.
      2.20 seems too much at the moment I would watch MA50 and 2.10

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  8. could wave 5 be extended in time? I ask because GDX looks ready to roll over to the 24 area

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    Replies
    1. As long as it stays in the channel and it is comparable with the other waves.... I do not see impulse for GDX.

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  9. Krasi, saw this an alt count on EWT. What do you think?

    https://imgur.com/f9Q90sM

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    Replies
    1. ED will not work w2 is too short and w3 too long... in arithmetic scale it is the same size like the supposed w1.
      The zig-zag - the important top was late April early May. There is the top of a than you can count b for a flat as most European indexes. This b on the chart is too short and small.

      It is a zig-zag two legs higher with roughly the same size with shallow, but very long sideway move.

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  10. Krasi, the last week you said me that it was wrong https://prnt.sc/r18wt4 because "in March/April the next 20w cycle high first makes higher high then lower low then higher high again. It is not supposed to work this way"
    But in your cycles chart it happens the same https://prnt.sc/r3i067

    ReplyDelete
    Replies
    1. It is not the same - https://invst.ly/pvqdk
      It does not make twice higher highs with an interruption in the middle for lower low.

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  11. Krasi looks like tvix going to 44 first your thoughts

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    Replies
    1. Probably 2-3 days higher and final low...

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    2. Louis, your 39.15 entry has been an excellent pivot and great buy price

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  12. Hi Krasi.. such strength, especially the breakout in nasdaq. Do you still think we will see a bearish turn anytime soon?

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    Replies
    1. Yes, NDX is not the market, NDX is 50% FAAMG which are completing wave 3 from 2009.
      Look at DJ,NYSE,RUT struggling... already the third week from the 20w cycle and I am still waiting for this final higher high to complete double top... strength indeed:)

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  13. your thoughts on this move? Wave 4 of the ED? or has the big move finally arrived? What price would be the validation for the big C down? Thanks Krasi!

    ReplyDelete
    Replies
    1. I do not think the pattern is complete. Cycles point to a short term low too - https://invst.ly/px48f
      15 days high to high and move lower as expected, now 14 days low to low so short term low is expected.

      Validation for reversal will be impulse breaking below 3150.

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    2. I would say it is w2 of bigger ED.

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    3. Very interesting as I still think gold is bearish and will surprise to the downside starting today. Shorted GDX, we'll see. Thank you very much

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    4. I think NYSE/RUT should make higher high too and crude oil needs more time with this move up.
      I expect everything to turn lower at the same time

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  14. Where do you see Gold and USDJPY from here?

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    Replies
    1. In the next few months the dollar should be higher and everything else lower.

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  15. https://www.tradingview.com/x/7Oxeq7wL/

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    1. Monday possible gap down opening below 3200

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    2. I am skeptical about this impulse.... most of the indexes have only zig-zag from the January low, NYSE/RUT did not make higher high, to the downside is a mess.

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    3. the same movement of the dayli, weekly and monthly indicators identified it between the crasch of 1987 and October 1989
      and between December 2018 so far the movement of the indicators is very similar

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  16. Hi, Krasi What do you think about US real estate market this time in terms of long time trend? Does it follow your estimate for a real deep retracement like SPX500. Hard to image housing market if SPX500 jumps down to 2500/2250 region... Thanks.

    ReplyDelete
    Replies
    1. This will last only a few months and it is too short to have a significant impact on real estate market.
      The real problems will come later when the bull market is over. At some point the yields will start to rise and the USD will start a bull market then we should see a deflationary shock between 2025-2030.

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  17. Hi Krasi, what is your shorting strategy this time (if you don't mind sharing)? Looks like today rejection was at MA10 daily. What indicators will you look for to add to the short (other than waiting all the way until 200DMA.

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    Replies
    1. It is not different it is always the same - either I have to see clear finished pattern(again this one without confirmation is 1/3) or reversal with impulse confirmed by corrective retracement(bigger position is allowed).
      Finished pattern is not satisfied... it is questionable at the moment, the indexes do not show consistent picture - most have only zig-zag higher some with higher high some with lower high.
      Sell signal is triggered bearish candle below MA10(unless we see crazy reversal the last one hour) with possible diagonal lower for reversal. If this is the case we should corrective zig-zag higher next week to test MA10 and sharp reversal lower. This is possible entry with stop above the high.

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    2. By the way I see only a-b-c lower so I do not think we have reversal.

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  18. Krasi uvxy 48 and change your thoughts

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    Replies
    1. I do no think the indexes reversed so UVXY should test the low at least.

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