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

79 comments:

  1. spy 400 no pullbacks

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  2. Another option w-x-y with diagonal - https://imgur.com/a/dSw9kfK
    Fits good with cycles the idea that we have 20w low.

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  3. I'm confused. Didn't you say this was no way in 3?

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    1. I am talking about a-b-c/B w-x-y/B... which 3?

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    2. Sorry I'm still trying to learn. It was in the Intermediate term.

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  4. Pretty much the same commentary for the past year. Not very credible at this point. Anyone constantly predicting a correction will be right sooner or later.. but tactical investing isn’t about being right once in a blue moon. It’s about delivering higher risk adjusted returns.. and I strongly doubt anyone following this blog has achieved that

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    1. Aha the investors... with their returns the same buy and hold for ever.
      When we see the correction wipe out the gains again how much returns would you make since 2018 - zero. Keep up repeating the same.... paper returns.

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  5. Actually I think the buy and holders are smarter than us. Who cares if it goes back to 2200. Their money is reinvested at a lower price while making dividends the whole time. Since they don't sell they don't care it dropped. Over the long term they always make money. Us on the other hand keep looking down and that scares most people from getting in. I'm sure plenty of EW followers are kicking themselves for not getting in. Worse are the ones trying to short this last year. They have killed their account. The guy above is actually correct. I highly doubt anyone following EW beat the market last year.

    Also, lets be honest here. No buy and holder is following EW. The people following are swing traders. They don't hold forever. When the market turns they will sell. When you say just wait they will lose their money sounds malevolent. It's not becoming of you.

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    1. Trump wants to win re-election. He will make sure the FED keeps the market juiced to the election and probably for as long as he can, he has a huge ego and wants new records, you can count on it. Corrections will be bought. The market is rigged against short sellers, don't even try.

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    2. The Sox could drop 280 points Still forget there's a gap sometime in December that needs to be filled and it will be filled so for my calculation we could drop 280 points then had 3800 after that is plenty of money to make

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  6. If 22 january was 4 year high and 31 january 20w low then the next 4 year cycle is strange, 1 week down 1 week up and then down for 4 year low and then up again, I think it is not possible

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  7. Krasi...

    You go sell in USA???

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    1. It is too early - for the a-b-c/B from chart two you have to wait for confirmation, for the w-x-y/B from the third comment the ED is not finished.

      See the first chart the neutral part(white) was completed diagonal with deep retracement. Still waiting for more information.

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  8. https://www.tradingview.com/x/LUaeO1HE/

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    1. https://www.tradingview.com/x/79oQXseJ/

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    2. All this drama for a pullback to 3160? At least shoot for 200 dma.
      No wonder people troll.

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    3. lol gaps always get filled there will be a big drop dec3 and 4 gaps will be filled 3080 the question is when
      if the market drops it will be a buying opportunity to 36oo plus by year end we could even see 4035

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    4. Much lower 2/3 of the returns are from AAPL/AMZN/MSFT/GOOGL
      They are completing wave 3 from 2009 and we should see them 30% lower.
      The indexes will follow after that 4 year cycle low and big buy.

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  9. Having a difficult time seeing this as a B wave. Might see 3450+

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    1. It is understandable, but zig-zag is corrective wave...
      The big movers are the tech stocks and they are completing wave 3 from 2009.
      Wave 2 was long sideways move retracing time wave 4 should be big wave lower retracing price.
      Just "moderate declines" to support for this stocks AAPL/AMZN/MSFT/GOOGL is already 30%... how will the indexes will react? I can not imagine something less than 20%.

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  10. right now im eying volatility maybe 38 39 on tvix to go long might be good

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  11. Hey krasi what is your thought on tvix now?

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    1. The same SP500 one more down up.... and TVIX 38-39 area

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  12. Watching this at the moment ED and 5w cycle high next week then lower into mid March - https://invst.ly/ptuhk

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    1. I am now genuinely hopeful for down move since the believers are giving up or postponing timelines...
      Yes I get it, as pattern changes one adjusts accordingly...no need to explain.

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  13. Shorted - good luck everyone https://www.tradingview.com/x/rtvByUGS/

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    1. I like your chart however we could pop to 3400

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    2. I will not be surprised to see reversal - GOOGL,MSFT,AMZN with reversal candles, reached the targets, the pattern looks complete...

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    3. Krasi, if you feel this is the case then why are you saying above about another high and postpone lower to mid March?
      This is exactly why people start trolling...

      Tbh people seem to be calling, almost prepared for selloff yet no trigger in sight. We all know selloff doesn't happen when everyone is ready. Coronavirus was a curveball which market digested quickly.
      Not sure what the next reason could be.

      Anyway, my point here is as follows ..
      Technically move lower should either happen around these levels, or postponed to much later. I don't see market hanging around these levels till mid March and then selling off.

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    4. Because both cases are still valid - for the first one this is the top we need confirmation to say the other ED is invalidated.
      The move lower does not begin mid-March it should be making a bottom mid-March. It should begin now for the first scenario chart two or next week for the ED.

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  14. What is your view on USO? Another lower low or do you think it has bottomed?

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    1. Difficult to say probably a bottom, RSI is oversold for very long.
      I closed my crude oil short position - week 19 with RSI oversold for 2-3 weeks.. no need to chase the last dollar.

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  15. Why not July 2019 40w high, end January 10w high and March 40w and 4 year high?

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    Replies
    1. Because you can not have two lows Dec.2018 and Mai.2019 without a high between them.

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  16. I was thinking about something like this: https://prnt.sc/r18wt4

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    1. I do not think this is right - 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.

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    2. Yes but this is dji, in sp does not happen that, so I think it may be right

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  17. I personally think this coronavirus thing is a lot bigger.. i think reports that are coming out feels like heresay.. knowing chinese government nothing is getting out with out their knowledge.. they might purposelly be underplaying it ... but i think its bigger than it is.. they also had that huge pig virus for a couple of years now where they eradicated like 25% of their pig stock population...

    Dont know whats gonna cause the market in grind hire in Q2.. at the moment just feels like clockwork, which is baiting suckers in in my opinion .. i think coronavirus will have bigger impact as travel to and from china will really slowdown...

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    1. Obviously the carnovieus Means nothing to these people they just keep Bidding up the market

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    2. Hey Louis, you going long tvix now?

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  18. Krasi, it's so strong, dont you think this is W5 of w3?

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    1. No I think it is the fifth wave of you emotions.

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  19. IM LOOKING FOR A SMASH DOWN INTO FRIDAY IF THAT DONT HAPPEN I WILL JUST GET OUT

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    1. The move from 31.Jan should be finished now waiting to see impulse to confirm the top or zig-zag for one more high. In both cases we should see easily 80 points lower.

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  20. Krasi made it very very clear this is not 3.

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  21. Sorry but it looks like, it's so strong

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    1. Strong does not mean impulse. Clear corrective waves across the board on every index.

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    2. Lower only mid March though right? :)
      Or you think we can get back to the mid Feb schedule as originally discussed?

      Just kidding, as it felt earlier that you were losing conviction too.

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    3. It was second half of February for 20w cycle low. It has finished early at week 17.
      Next low should be in March for 5w low. The important low should be in June.

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  22. More zig-zags... the move from 31.Jan is another corrective zig - https://invst.ly/puik4
    DJ on the chart it is better visible - clear zig-zag itself consisting of zig-zags.
    I see two options - w-x-y/B(red) leg higher from the October low. Most of the indexes count very well with zig-zags - no there is no third wave.
    Second option - it is wave iii of ED for c part of a-b-c/Y/B

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  23. I think the 4 years high will be in March with a lower high as in 2015. That 4 high was not in July 2015, it was in November 2015, now the same

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    1. I do not agree Nov.2015 is in the middle of the correction....

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    2. But the first 40w high was in August 2016 then the previous one was November 2015. If the 40w-4year would have been in July 2015 then that 40w would have lasted 57 weeks, it's too much

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    3. It is in April.2016 not in August.

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    4. If January 2018 was 40w high is very difficult count 40 cycle high between April 2016 and January 2018, cycles very big

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  24. Hey krasi tvix target in your opinion thanx? im thinking 38 to 38.60

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    1. For something like complete pattern SVXY to 69 and this translates to TVIX around 36,80

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  25. Krasi Are you telling me TVIX Is going to 36 and then to 80

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  26. https://www.tradingview.com/x/YkmnnXwe/

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    1. we are almost there https://www.tradingview.com/x/Rji1nciO/

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  27. It is not wave B, it is 5 of III from 2009

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  28. Wonder what news will set it off. China now counts 50k cases?

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  29. Watching this H&S with target support and MA200 on the daily chat - https://invst.ly/puvty

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  30. Krasi - still think this is a mini wave 4 of the diagonal?

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    Replies
    1. Yes, although the cash index does not have overlapping... but one more up for 5 waves.

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