Mar 14, 2020

Weekly preview

"Texas chainsaw massacre" episode 2 at a cinema near you:) The whole "strong" rally wiped out for three weeks, just the tech sector holding.
I know for many it is not funny, but I take it with humor. At the end it is just money it should not be the most important in your life. Look at it from the bright side - great buying opportunity. The highs will be exceed in the next years, just be more wise next time and do not fight the pattern and cycle even the FED can not:)

It was much worse than expected second leg lower with 162% extension instead of 62%. After such powerful first leg you do not expect extended second leg, but there it is.
The pattern - there is two legs lower which is zig-zag for me and this is wave "a" of a bigger a-b-c zig-zag. Alternate somehow we have another lower low next week, then I have to count impulse. In this case the price low will be the low for the pattern expanded flat and trading/cycle low will be later in June testing the low with higher low(see weekly chart).

More interesting is the big picture, remember what I wrote in the long term update - pretty much everything lower, USD and bonds higher. We saw crude oil/energy stocks massacre, then the indexes, silver and gold miners joined the party, even the cryptocurrencies followed and in the mean time bonds shoot up through the roof.
Only gold is still at elevated levels and USD not making new high... we have definitely blood on the streets in every sector and it feels like mass liquidation event mini 2008 exactly what I was expecting. The point is it is happening now and I see levels, which I was expecting to see in June not in March.
My best guess is probably this is the worst part of the correction and in June we will see test of the low - lower lows but not much lower.

P.S. it is not fun many people died, but judging by the cycles in the summer all this virus story will be over. I know what most will say another "virus expert", but everything in this world is interconnected. The cycles do not arise from nothing they are reflection of what is happening in the world, this is shaping the mood and this mood is reflected in the price movements.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - there is two legs lower, for impulse you need one more low. The problem I have with this impulse is in the third wave there is no waves 2 and 4 just one reaction in the middle which divides it in two equal parts which is zig-zag not third wave. Second the price action is 1:1 with Dec.2018 the Fibo relationships, this one day in the middle of the second leg, the mega reversal(>12% the futures). Back then the wave ended as double zig-zag wave y. Why should be counted different this time? Every wave has it's personality - w4 should be the weakest. 12% rally, closing at the high for the day, printing bullish reversal candle, all this at the end of the week(very important). All this are signs for a reversal not for the weakest wave.


Intermediate term - I think we should see retracement which takes time, many weeks even into May will be perfect. The market needs to calm down first. The retracement should be corrective, reaching 50% less likely 62% and closing at least two gaps, the third will be a bonus:)
From the beginning I am watching the Oct-Dec.2018 decline for a guidance. History does not repeat, but it rhymes. It seems this time we have the strong leg first and the next one should be the weaker one. Both strong legs then and now are exactly the same just on bigger scale this time. Interesting if we will see again a flat as a pattern to burn time. There is no much options the others are triangle and combination.


Long term - C wave lower running. Both scenarios adjusted after the huge drop. From the beginning of the decline following the triangle pattern, it is more likely.


MARKET BREADTH INDICATORS
Market Breadth Indicators - hammered down.... oversold to the power of two. Turning up from extreme oversold levels. We will see tests of the lows price and indicators.
McClellan Oscillator - extremely oversold twice and turned higher.
McClellan Summation Index - sell signal, extreme level associated with important lows.
Weekly Stochastic of the Summation Index - sell signal, oversold.
Bullish Percentage - turned up from 1, crazy.
Percent of Stocks above MA50 - turned up from 1, crazy.
Fear Indicator VIX - challenging 2008, crazy.
Advance-Decline Issues - small short term divergence and turned higher.


HURST CYCLES
Daily(trading) cycle - sell signal. First MA10 should be tested then we will see another low after that expect buy signal to be triggered. Low risk trade is the next low - lower or higher what ever comes.


Hurst cycles - we have a low this week as expected and what for a low. Usually when you have such steep decline the cycles are getting shorter. I will make the assumption that both cycles will consist of 6x20d cycles and not 8. So next we should see 10w cycle high in 1-1,5 weeks.


Week 6, given the steep decline the cycle should be shorter more like 18 not 22 weeks.

103 comments:

  1. Texas chainsaw massacre indeed :) love the titles ...

    So the 1800/2000 low wave 3 projection is off the table now in your LT chart? Is it given the extent of wave 1 decline, wave 3 limited to retest of 2400?

    Thanks again for the excellent work, and for holding to your conviction yet again!

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    Replies
    1. This retracement is big with the same size like the previous one early March so worst case it is w4 with final wave 5/C. Targets in this case 5=1 is 2280 / 5=0,6x(1to3) is 2220.

      I am skeptical about the impulse because w4 should not behave this way and most shares I watch all with clear corrective pattern not even close to impulse.

      Delete
  2. Thanks for the update. Like you said the C wave of your zigzag splits into 2. This is not a zigzag anymore. A zigzag needs impulse-correction-impulse. Not what this shows.

    Also, imo we are heading much lower like 1800. Look at Russell, DOW, NYA all broke through Dec 18' lows. You will need to update your long-term count because a 4th wave that will head this low doesn't look right.

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    Replies
    1. It is called Double zig-zag, look closely I do not count impulses.
      I do not see a reason to change my analysis.

      Delete
  3. it may not be the most important thing in life(money)but try getting along without it..retireries just saw a shit ton of money lost out of their accounts...there is no humor in that

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    Replies
    1. i feel for your sentiment about retirees and others who lost money last few weeks. but that is a broader discussion about suitability of investments for an age group. (retiree accounts should not be heavily equity weighted). it cant' be that no-one complains when 401K keeps going up, yet has an issue when market goes down.

      This goes back to Krasi point, equity investments are not supposed to be hold to maturity. you can make or lose depending on what part of the cycle you enter and hold it. That just comes down to sound financial advice.

      It was a worrying sign already in Jan when retail were quoting Buffet and talking equities as long term hold. If that is the case, they should have the staying power to tide this through. As krasi clearly says, fresh highs possible in few years.

      All the best!

      Delete
    2. I have warned 30% lower are coming. All I have heard was mockery - we are making returns, no one can beat the index blah blah.
      This is all I can do and am doing it for free when other charge 100$ for wrong analysis.

      Delete
  4. I think the end of C will go quite a bit outside the longer-term tend line, but by the end of the month it will just be a long wick. Should scare enough people out if we trade a few weeks below it. Thanks Krasi!

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    1. This is very likely scenario if the impulse plays out.

      Delete
  5. Hi Krasi…it’s always good to compare different ideas as this gives your followers on your blog a better understanding of how the stock market moves. I know you have had enough of my suggestions about this triangle formation but I feel compelled to post this last message…I promise it’s my last one about it.:)
    In your last comment to me on your previous post you said that these expanding triangles are only from theory books and not real in real life. Here is one example from SPX500 :


    https://1.bp.blogspot.com/_raWvBSRMXic/TBlYJY705tI/AAAAAAAABPc/KugA2VyGC4o/s1600/s%26p50006172010b.jpg

    It’s a giant expanding triangle lasting about 9 years during 1970s. If you want I can find you some other examples. So it happens. Rarely, but it does. And if Frost and Prechter mention it in their Elliot Principle book I don’t think they make it up.
    However, I think I understand the reason for your rejecting the idea that s&p and Dow have this pattern. It’s your fixation on two assumptions: first is that this is wave IV of the primary cycle from 2009. The second is, as per your long term chart, that the bottom trend line will not be violated by this final move on both weekly and monthly charts. This way the bull market can continue its final wave V with monthly chart trend line being intact. This is your assumption, I understand.

    Here is the logic I use: point# 1. The last two drops on the market, Feb 2018 to April 2018 and Oct 2018 – Dec 2018 were zigzags, correct? Point #2. I’ve been following your blog for quite some time now and I remember exactly how convinced you were that between April 2018 and October 2018 the market was in B wave. Remember? So, I noted in my notebook the B wave. It was not a motive wave but only corrective and I agreed on that with you. However, on your long term chart, instead of B you marked wave III now. Why? Point#3. From Oct 2018 to Dec 2018 we had another zigzag down. Quite obvious on daily, weekly and monthly charts. Point# 4. from Jan 2019 until Feb 2020 we had another corrective wave up, you were convinced about that and you argued with some of your followers who insisted this was 1, 2 and 3 higher in motive move. Correct? And I agreed with you. However, you still called this wave B. Why? Did you forget about April – Oct 2018 B wave? If each wave since Feb 2018 is corrective without being interrupted by a motive wave there can only be one B, not two of them, right? So, the last wave up from Jan 2018 – Feb 2020 I had to call wave D. So, it follows that, so far, what the market printed in full are four corrective waves A, B, C and D. Correct? All of them zigzags down and up. Each zigzag is a 535 formation, just basic stuff. So, it follows that each initial drop on Jan 31, 2018 and Oct 03, 2018 must have been 5 wave move down. And it’s quite easy to see it. Therefore, both of those initial drops were impulsive moves.
    The last three weeks Dow and S&P started to fall in their subsequent corrective wave. What wave can it be? You have to call it E wave because all the previous ones were corrective too. Is there any other corrective formation consisting of 5 consecutive waves other than triangle? I only know triangle. And if you look at its shape it is expanding, like the one above, link attached. And because it is presumably the last one it should also be a zigzag like the previous ones in this whole correction. And because it’s a zigzag this first drop is impulsive 5 wave drop, same as with wave A and C. Once this drop is over we should have b up and then c down to complete the triangle. If this happens your long term chart underestimates c wave by a large distance. Given this current drop in a, which should have approximately 1000 points in s&p, wave c should be 1.618*a or about 1600 points. Even if b wave rally to 3000 or so the bottom of c might be as low as 1400 smashing the current long term trend line to pieces. Even if we assume c= 1.272 of a the drop should be at least to 1700-1750 in that final wave. Minimum.

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  6. This is the second part Krasi.. I went over the limit with the characters.

    If the above analysis is correct, how does it contradict your assumptions? First of all we need to find where the current top of this bull market is. Is it Feb 19 2020 with 3393.52 points? In order to locate it there one should ask a question : does a corrective wave’s top count as a top? Or is it Oct 03 2018 with 2935? This was also corrective B wave’s top. Same question then. I think the only valid top was on Jan 26 2018 with 2872 on s&p because it was the top of a motive wave. After that it’s all corrective stuff. Any tops from corrections are not true tops. The second thing we need to decide is whether that top was really wave III? If this current correction takes us to below 1700 then I don’t think so. This would be a market reset, the end of the bull market. So, that top, on Jan 26 2018 was actually wave V. And IV was from Aug 2015- Jan 2016. And we have entered bear market on Jan 27 2018 and we have been in it since, so far 2 years and 2 months. Declining corporate earnings since 2018 confirm this. Actually high earnings reading for 2018 was mainly due to massive tax cuts. I think you are right about the timing for the end of this correction, probably June but due to my different observations, as per the above, I disagree with you on 2100-2200 low. It should be much lower and after that we’ll start a new cycle.

    Krasi, I wish you saw this the same as I do. If we agreed on the pattern it would be helpful to exchange thoughts of the wave counts in this formation. It’s hard to do it if you have in mind another corrective structure. I would appreciate if you could show me all errors in my analysis. Not that you disagree with the concept as a whole. I took long time to write it, with all the details so that you could point a flaw in that logic. If I am right then the wave c of E will be massive and a great opportunity to make big profits and I am prepared to make a significant wager on it. But I need your feedback. And I think your followers will benefit from your answer too.
    Thanks
    Kris

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  7. Tooooo much theory EW and what the market should do. My approach is different, more simple watching the current move and then forecasting what the next step should be. Trading is important not the EW theory.

    Is it expanded triangle - who cares, personally I do not care. Digging too much in EW theory and telling the market what should do leads to bad trading results.
    Core indexes NYSE,DJ/SP500(the same patterns),NDX,RUT. For 3 of 4 NYSE,NDX,RUT expanded triangle is not working - what is the conclusion?

    Keep it simple(practical is not random in the name of the blog) - zig-zag lower, next another zig-zag higher b, then final decline. Yes it is that simple.
    Everybody can call it as they want - expanded triangle, expanded flat what ever.
    This theory discussions are sooo useless - huge waste of time and energy.
    My goal is not to make the best forecast, my goal is to prepare for the next trade.

    ReplyDelete
  8. It’s a very simple pattern based on EW theory which is a hallmark of your blog. Recognizing the pattern leads to successful trading. Simple watching and forecasting is not enough. I only broke down the whole pattern to smaller pieces so you can help me with finding a flaw in it. I understand you can’t find any so that’s good for me.
    By the way not all indices have to look exactly the same because they differ in their stock composition. So the rule of thumb is to look at s&p first because it is the most diversified index and then see how other indices compare. So s&p is the base and it has expanding triangle pattern. Dow looks the same. NYSE has shorter B wave and Nasdaq has longer D wave. So all indices show the same pattern with slight differences in NYSE and NASDAQ due to their structure. Only Rut shows different pattern which has a huge zigzag on the monthly and weekly charts. This is as simple as it can be. Good luck Krasi.

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    1. I did not want to waste my time with fantasy patterns, but when it is so important for you I checked the books, here is a quote from Neely - "I have never seen a 4th-wave expanding triangle. It is logical to assume they exist".
      This is just a polite form of my answer, when I hear expanding LD/ED/Triangle - nice looking picture in the books, but it is more likely to see flying unicorn than that:)

      Here is a few other rules:
      - the least likely expanding triangle is horizontal - every succeeding wave is longer than the previous. b shorter than a or d shorter than c a more common.
      Quote "Why? It defies the natural tendency of a market to accumulate or distribute... the longer the period of time covered, the more improbable the formation of horizontal expanding triangle becomes".... 2,5 years later not looking good.
      - wave is usually the most complex and time consuming from all five waves.... the most simple and fastest wave so far not looking good.
      - usually wave a and e relate with 161,8% if the e-wave is really explosive 261,8%... it is already bigger than 261,8% and it should move much lower - not looking good, usually waves with such big difference in size are not of the same degree/pattern.

      Here comes the stunner:
      - the pattern after the triangle(wave c or 5) should not completely retrace wave e - short said lower high.

      All this above is not from me, it is from Neely. It is obvious that the probability for this pattern is extremely low and brakes a few rules. Lets say they are just guidelines - will you stick to the theory and expect lower high?

      I would not, keep it simple - this low is 4/9 year cycle low even 18 year cycle low is very likely. This 9y cycle is very strong right translated and the next one will make higher high.

      Delete
    2. Krasi.. first of all I did not post my comment to spar with you and proof you wrong for the sake of winning argument. I am trying to make some money and noticed that a big opportunity is knocking to my door. And just want to discuss it. That’s all. So please don’t take it personally.

      So, in my initial comment above I suggested that this triangle is not wave IV. I suggested that the bull market ended with wave V on Jan 26 2018 and s&p started its bear trend. Please read it carefully because I spent long time on that comment and don’t want to repeat it here why I think this way. All the details are there. The second point I want to make is about the rarity of this corrective structure. If it’s so rare then how can someone make proper fibo measurements between its waves. Lack of data means lack of exact ratios. You say that the ratio of e to a is usually 1.618. Well, if you look at the triangle from 1970s that I attached to my comment above it is actually 2.62 roughly speaking. Since we can see very few of those triangles how can we tell if the fibo ratios are not expanding ? In the current situation on s&p the ratio c to a is about 1.62. If you assume the same ratio on e to c then you get approximately 2500. However if the ratio expands also and will be for example 2.618 then the total drop in e will be 1390 point to about 2000. How about if the ratio expands more? We don’t know.
      Anyways I don’t want to waste your time Krasi if you think it’s a fantasy. I wish you and all your followers big fortunes and most of all open minds because only open minds will make those fortune making possible.
      Kris

      Delete
    3. This is even worse neither b wave nor 4-th wave triangle - forget it.
      I was counting always Oct.2018 as b/A not B and two distinct waves. It is either normal triangle with high Oct.2018 or w-x-y with high Jan.2018.

      1970s chart is cut to show what you want to see. You are making the same mistake taking the last two moves which complete the leg higher as a and b of expanding triangle.
      It is the same expanding w-x-y or triangle with low 1978 - short said the same pattern like now.

      Delete
    4. Hi Krasi, when you say "I would not, keep it simple - this low is 4/9 year cycle low even 18 year cycle low is very likely. This 9y cycle is very strong right translated and the next one will make higher high." ...

      1. Does that mean now the 1800/2000 June low scenario is off the table given the acceleration to downside seen now? i.e 4/9 year cycle low already 2200/2400 area?
      2. Does it further mean the cycle high in year 2023-24 followed by ten year decline is also negated? Since you say this being 18 year cycle low is likely.
      3. You talked about 18 year cycle yesterday, is that this updated pattern is coming from?


      Delete
    5. 1. No, the timing has not changed another low later is needed to complete 20w/40w/18m cycle - the problem with levels is I can only guess. Corrective structures are difficult to predict. It could be anything from slightly higher low to 1,61 extension lower. Until we see b and the half of c it is a guess.
      2. No, I expect to see the same game like Jan/Feb with the 20w cycle on much bigger scale 2-3 years instead of 2-3 weeks, btw I expect the top in Q4.2022 at the moment and 15 years correction.
      3. I have updated only where the 4y cycle high is... later thinking about it 2018-2000 is 18 years and 2020-2002 is 18 years given the speed and size of the price action never seen before makes it very likely that we have not only 4y cycle at work, but something much bigger.

      Delete
    6. Thanks for patient clarification.

      Trade safely for the moment, lots of landmines everywhere.

      Delete
  9. Patterns always interesting. December 2018 vs Feb/March 2020, agree with your thoughts. Great analysis Krasi!

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  10. Hi Krasi,
    What’s your view on Oil? Do you think we will see a recovery upside before we hit lower low? What would be the short term upside target?
    thanks
    Nilesh

    ReplyDelete
    Replies
    1. It looks like zig-zag up now zig-zag lower 28-29 then zig-zah higher 37.

      Delete
    2. alternate the zig-zag up running to 38

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    3. Hi Krasi, What's the downside target you expect of Oil given 28-29 range is now broken?

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    4. The decline completing or alternate this is w3. I do not have concrete target.

      Delete
  11. Krasi, it looks like W3 every day they open with doun gap, ther is panic, it looks like 2008

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    Replies
    1. You can thank the FED. Instead of letting the correction take it's course in 2018 they have created monster fake B wave. Three weeks later all gone. Was it worth?

      FED can only try to control the perception that they are in control. It is just a matter of time, for everybody to understand that they can not control anything - then it is game over.

      Delete
  12. Look at the contract, don't you think it's the 5W?

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  13. The DAX is making lower low today

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  14. FAX is in 2013 level, in 3 weeks, amazing

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    Replies
    1. I showed chart last week. I think the bull market from 2009 is over for the DAX and we have big flat pattern from 2018. 300 points from the low probably w4/C started.
      Another 1-2 weeks it is finished.

      Delete
  15. It develops fast, I mentioned that long term we are seeing the expected levels now.
    All I look says the low should be in the next 2-3 weeks. Probably in June test of the low.

    Personally I was waiting for years for the oil companies and gold miners to complete their patterns.
    They look almost done.
    My advice instead of shitting your pants look for bargains.

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  16. Whatever price action I thought would happen in 2-3 weeks is happening in 2-3 days. Whatever I thought would happen in 2-3 days is happening in 2-3 hours. ETFs, algos, whatever the reason, it is way too fast.

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  17. I think you write, I took long s&p

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  18. Waiting for your "one more low" post Krasi ...maybe tomorrow for this leg..

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    Replies
    1. I have to disappoint you the best I see this as the bottom of 3/c and 4/c running for several days.

      Delete
  19. The alternate pattern impulse C to complete expanded flat is the main scenario again - https://imgur.com/a/G3rIIkv
    Wave iv/3 is too big as wave 2 of higher degree, for DJ ii/3 makes higher high above i/3...
    Alternate is a-b-c lower.
    Waiting curious for the move up to see if it is 4 or b.

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    Replies
    1. MSFT/APPL with two legs lower with the same size - so a-b-c

      Delete
  20. I think that AAPL is the strongest stock in the market. It will probably be the last one to plummet and the first to recover. By this weekly chart, it looks like it has a ways to go. We shall see. https://stockcharts.com/h-sc/ui?s=AAPL&p=W&b=2&g=0&id=p17200159251

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    Replies
    1. There is more to the downside. I am watching 200-220 as support level.

      Just to clarify what I mean above - with one more low today it is possible to count 1-2-3 which does not exclude a-b-c. Next we should see w4 or x.

      AAPL/MSFT have clear a-b-c so next should be x. We will see if the indexes will follow.

      Delete
  21. Krasi is probably right, this has more to go on downside as the 2400 trend line broke during cash session today. But i fancy a small long for another retracement bounce. Just trading position with tight SL.

    For those of you who keep coming back questioning trading vs. buy-hold forever, this article might add some value:
    https://www.gurufocus.com/news/1068609/the-enduring-power-of-cash
    Especially more relevant since the BTD marketplace is changing.

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  22. I have a feeling this is an A wave and not wave 1 of 5. THis is too large for this to be wave 1 of 5 and would mean we could to SPX 1100. This reminds me of August correction except much bigger scale. What do you think Krasi? The A wave looks like a leading diagonal .

    ReplyDelete
    Replies
    1. If it is an impulse it is completing expanding flat from 2018.
      More likely it is part of a bigger zig-zag. Many stocks with corrective patterns, but unfinished.

      Delete
  23. I think so too, it looks A wave

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  24. This movement is similar to October 1987 (-34% in one month).

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    Replies
    1. Looking the pattern 34% is the minimum what we will see to the downside.
      Crazy markets.

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    2. Though interestingly, 200WMA support was held in 1987 unlike this time where it is in very bearish territory.

      Delete
  25. Gold C wave up now before the big 3rd wave down?

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    Replies
    1. gold wit perfect impulse lower from the last top:)
      If you count impulse lower it should move very low and then there should be more to the downside.
      Probably b wave from a zig-zag.

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    2. thanks for your reply, I thought so too, playing both sides today!

      Delete
  26. Could a rapid decline to 1800 in the S&P 500 fall within the guidelines of a valid Elliott wave count?. I believe this will happen within days

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    Replies
    1. I can not see such count. Possible continuation lower is ED for w5 2250.

      Delete
  27. Don't you think it still w3?

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  28. Possible pattern - https://imgur.com/a/1Jhv8Ks
    The last move lower is three waves and if you project ED 5=1. The big reaction is really w4 as it should be.

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  29. Krasi, do you still think it's ED

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  30. So We still in W3? base on the weekly chart? Or C wave?

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    Replies
    1. The ED is now suspicious iii too big but still possible, this whole impulse is suspicious - https://imgur.com/a/e84rpqQ
      The RSI shows too many zig-zags, the waves look to me like zig-zags.... usually an impulse does not look this way.

      Delete
  31. Krasi, dont you think we finish the cycle, for 2 years?, There is no ED

    ReplyDelete
    Replies
    1. It smells like triple zig-zag in sync with most shares which show clear corrective patterns.
      I will not be surprised if the bottom is today.
      I will wait for the test of the low May/June what ever it comes - lower/higher low.

      Delete
  32. Replies
    1. Yes, not a surprise at all. The divergences were in place and now there is completed pattern.

      Delete
  33. Great calls. If today was the bottom how high do you see it going before a retest of 2300? 2800?

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    Replies
    1. Once we have a bottom is in place I think we should see at least 50% retracement.

      Delete
  34. shouldn't we get one more low? https://invst.ly/q5xq6 thank you Krasi

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    Replies
    1. Maybe this is the one more low happening right now in Asia session. Went to 2459 high, and collapsed to limit down 2280.

      Delete
    2. I hope so ED is great opportunity for an entry.
      This second leg lower consists of two zig-zags... I am still trying to figure it out what it is.

      Delete
    3. Is anyone trying to play this entry from long side?

      Key risk here is market disruption gap risk, exchange shutdown ...

      This is what happened in Philippines.
      https://www.thestar.com.my/business/business-news/2020/03/19/philippine-stocks-plunge-24-as-trading-resumes

      Delete
  35. Your long-term count is off. This wave is of a larger degree and is an end to the wave from 09' low. I think by the end of this correction/crash we will be sub 1800 SPX.

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    Replies
    1. I have the same answer for the bears like for the bulls - 3 waves is corrective pattern, it is not a new trend up, it is not a top either.

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    2. You are correct

      Delete
  36. I believe you are right

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  37. Krasi, you right about 3 waves but this is wave A, going up to wave B then wave C till June

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    Replies
    1. If there is C probably like Feb-April.2018

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  38. Replies
    1. Too early to say, I still think it could be higher low for triangle.

      Delete
  39. 3 waves is a corrective pattern, but that doesn't tell you the degree. You can have a 3 wave pattern that corrects a supercycle like 1929. This could go to SPX 1200 for all we know if this is large degree correction

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    Replies
    1. calm down, my friend. i have been in the bearish camp too but where are you getting 1200 from? which 3 wave pattern? pls post!

      Delete
    2. Not three waves to the downside, three waves making higher higher - this is not a top.
      The correction has not started now it is running for two years and in 2-3 months it will make high degree low - 9 year cycle low.
      I can only advice the bears not to fall in love with this decline. The bulls learned it the hard way do not repeat their mistakes.

      Delete
  40. Another count which makes sense with all this zig-zags and one leg missing for the smaller ED shown yesterday - https://imgur.com/a/b3sVky8
    The Fibo measurement is this time in arithmetic scale.

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    Replies
    1. I like that count, especially if we make new lows. If we get another high around 2780, that will be a 4th wave and we will continue to the downside.

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    2. Ending diagonal is ending pattern - the name says it all.

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    3. You're too limited. This could be a triple zigzag contracting triangle. In that case it would be a B wave. I take EW seriously and that means counting waves in atleast 30 min handles. The B wave you labelled is a 5 wave structure that is clear on futures. That means it by itself is not a B wave and you need to look at other possibilities.

      I know this may seem too complicating or I'm overanalyzing. But the markets are not simple, otherwise anybody could identify these patterns and make money.

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  41. Another option is that the bounce from 2850 to 3130 was the B wave and we're in the middle of C down.

    Nearly every watcher looking for a bounce to 2800/2900 here, that scenario would catch em all on the wrong side

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    1. This C wave is already 1,618 bigger than A so it is not the middle it is the end.

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  42. As if anything in this market has been realistic for the last month ! I'm just saying that it's not impossible & would catch a lot of people offside

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  43. https://invst.ly/q6d39 I think you're right Krasi, the corrections are hellish to count and trade, but in the end - an ending diagonal. What a bull trap today!

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    1. Some ED is running... waiting for the moment.

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    2. Krasi,
      So you expect new lows from here as I got confused based on your comments in other elliotwave blogs. Long term do you see 2015 highs as support or 2100 as low and then retesting then higher from there? Thanks

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    3. Most likely final lower low to complete ED and this leg lower.
      Then we need to see the move up. There will be test of the low I will not be surprised to see higher low.

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    4. Good call krasi. There was an attempt to test the low during Asian hours did not get below 2300 though.
      Strong reaction and rebound here. Also other Asian indices NKY double bottom 16k and HSCEI basing of 8500.
      Could be the start of the retracement bounce here.

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    5. Still not 100% sure, it could be something like this - https://invst.ly/q6kcy

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    6. Thanks mate, looks like there is a chance of this given the price action. Looks like market chooses to follow oil today.

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    7. Well done, exactly to your script!

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