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.

78 comments:

  1. Krasi,
    Thank you for your post.
    I am learning a lot from your post about corrective and impulse waves as I remembered that you said it is very important to learn those.
    I can slowly appreciate your post after I spend some time to learn those 2 waves but I am learning.
    I saw the final wave down yellow or red with the red being the most probable.
    May I know when will that wave begin? It looks like around mid of May from the first chart when it topped ( hit the MA200)
    Pls let me know your thought when the final wave down ( red or yellow begins and ends)

    Thanks

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  2. What if the price continues higher and alternate pattern - https://imgur.com/a/3qayl2I
    Some indexes made a low on 18th of March and this corrective move is very shallow so I will not be surprised to see this alternate pattern.

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    Replies
    1. So 4 year low cycle in June instead of May?

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    2. That's why I think this is wave 4. wave 1 and 2 occurred in Jan and Feb. This is best seen in small caps and Nikkei as well as Nifty

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    3. Read some basic EW rules... counting to 5 is not the same like counting EW.

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    4. The 4y low should be in June, May is the exception.

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  3. Krasi,
    I tried to load the alternate pattern but failed.
    Is there something wrong with the address?

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  4. Krasi- once a low is reached in around 2023 and the secular bear has firmly taken hold in the S&P, do cycles suggest a lower low between then and 2030? Would you be able to post a decade view chart of the S&P like you have in the past for gold?

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    Replies
    1. This may be too tall of an order at this point and you've pretty much answered on the previous post. Sorry about that.

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  5. Krasi,
    Thank you for your post.
    I just watched https://www.youtube.com/watch?v=iX7uTkmTWN0.
    What do you think of this bull Hurst alternative from 16:11 onwards?

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    Replies
    1. This is green on my weekly chart. Only if we see impulse higher... and at the moment it does not look like impulse.

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  6. Why 4 year low in June? If 23 March was 10w low then the next 10w cycle around 7-8 weeks then mid May for the 4 year low, I think this is more likey

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    Replies
    1. Who says the cycle should be symmetrical? Usually when one cycle is shorter the next one is longer so you have average length for the next longer cycle.

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    2. ok, but it will be at the beginning of June, not at the end

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  7. Hi Krasi. Thank you very much for sharing your work here. I would like your take on gold miners. We already have 5 wave up from the low last month. I'm counting it as completion of wave 1 of C. What is your take on gold miners?

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    Replies
    1. Two more waves are needed for impulse - 4 and 5, so far is only double zig-zag or 3.

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  8. Krasi, for me this week is 10w high because 18 February was also 10w, 20w, 40w and 18m high.
    This week or the next one we will start to decline into 4 year low.

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  9. Krasi your thought on GDX I'm thinking 25

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    Replies
    1. Either 30 or lower low with 25 just a pause on the way lower.

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  10. Krasi please your view on Palladium and Tesla.

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    Replies
    1. PA - I would say similar to the indexes higher into mid May and lower low to complete the correction - https://invst.ly/qli4x
      TSLA - at first it looks like impulse but I have my doubts we will know in the next weeks. I think it will follow the indexes too - lower now, higher in May and final sell off.

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    2. Thank you for your brilliant works.

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  11. Krasi, what is your take on today's SPX and RUT price action? Probably asking for too much as you just provided an update over the weekend but the price action outside the wedge is turning out to be quiet interesting.

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    Replies
    1. Nothing interesting sideways correction b for a flat.

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  12. Hi, Krasi You said it's going to be in inflation cycle in a few months. How long do you expect? In June/July or Sep/oct? The same pace as SPX finishes this down movement in the summer as you estimated before? Now in the US COVID has already over 1 million people affected but still no end. What do you think?

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    Replies
    1. Nothing changed expecting a low in June and at least a year higher.

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    2. So the US housing market would be the same pace too? Thanks.

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    3. I doubt the housing market can keep the same pace like stocks.
      I doubt the economy will get back to normal.
      I can only guess.... probably the housing market will rebound in the late stages of the final rally next year Q1/Q2 2021 before go down again.

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    4. So in short term, the US housing market will keep going down until end of 2020? It's a crazy world... I feel a bit confused since you said before "In a few months inflation phase should begin for 2-3 years I suppose the real estate market will be higher too. After that I expect two declines one into 2024-2025 rebound 2-3 years retracing big portion of the decline then the worst part into 2030." That sounds to me like that we will have another wave of US housing market in the next 5 years until 2025~2027 to begin the final decline.

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    5. I was thinking so2-3 years, but with this crash and virus I am starting to doubt it will take so long. We will know when we see the speed of the move up.
      I can not say how the real estate market will behave with all this up and down. I suppose it will rebound, but not the same crazy up like stocks... I doubt the real economy will make some strong recovery.

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    6. Thank you. It looks like better renting than purchase real estate property in the next few years...

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  13. Tramp by everything, s&p 2900

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    Replies
    1. Obviously you have not learned the lesson last time.

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  14. It looks like 5 waves impulse

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  15. Replies
    1. I will repeat myself - for the last few months have not learned anything.

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  16. I think the move down from February is the wave A of a triangule, the wave C will start soon. This triangule is the wave 4 from 2009

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    Replies
    1. This triangle is too short in time 5 month correcting 8+ years. If there is a triangle it has begun in 2018 and this is D with E to finish 4 from 2009.

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    2. I think c+d+e will last to october

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  17. Krasi, so how do you explain the move on Monday and today?
    And the vix?

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    Replies
    1. What pattern is two legs with the same size and 0.38 retracement in the middle? I call it zig-zag.
      Either expanded flat or the move up is over.

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    2. I think the move up is over, I go short

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  18. Replies
    1. Lucky streak:) just matter of time to be wrong.

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  19. I hope you are not angry, it looks 5 waves because we have today one more high

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    Replies
    1. Sorry, lately I am not in the mood, easily irritated. The kids not letting us sleep the last 10 days and crying all the time.
      I know what you mean at first it looks like impulse, but looking closely corrective structure counts better. Going trough different indexes complex combination looks better.
      Now it is just more complicated is the move up over or do we have just expanded flat.

      TSLA the extreme case looks like clear impulse, but it is probably double zig-zag.
      Waiting to see the move lower....

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    2. expanded flat can look like 5 waves

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  20. What do you say about cycles

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  21. Replies
    1. 20 day cycle running and should turn lower soon for 8-10 day lower to make 40 day cycle low.

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  22. each day that passes is more likely that the last week was a low cycle of 5 weeks, not?

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    Replies
    1. No, 5 weeks is 40 days cycle which lasts 30-36 trading days.
      20 trading days is too short.

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  23. Krasi, can you show us the waves, it really looks like 5 waves

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    Replies
    1. It is not 5 waves of an impulse, it is structure corrective wxyxz

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    2. I have posted this chart the weekend if it goes straight up - https://imgur.com/a/3qayl2I
      Or wxyxz it does not matter. Impulse does not work for many indexes for example XLF/RUT overlap.

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    3. in this case, no more double correction? We've already passed .618 fib

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    4. It is not a simple zig-zag, it is X or leg from a triangle. That was the expectation from the beginning.

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  24. Crazy to me after everythingSPX only 60 pts from 3k

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    Replies
    1. It is how it works. I wrote to far too fast from MA200 the result is it is getting tested.
      Now the guys with much lower disappeared and as I see many counting the days when we will see 3400 and 4000.

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  25. Or maybe this - https://invst.ly/qmlaa
    I do not know, maybe I am wrong, but impulse just does not feel right.

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    Replies
    1. Krabi,
      Thank you for the graph above using investing.com.
      It is somehow clearer using investing.com.

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    2. This scenario will fit good with market breadth and indicators - it will give them time to make a top and divergence. Usually they do not make U turns.

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    3. As Grafton opines, "positive sentiment takes time to unwind." Rounded tops vs. sharp bottoms.

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  26. futures go down, reversion is starting?

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    Replies
    1. I doubt it. I think we will see one more high.

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    2. One more high would also set up potential for bearish divergences with the indicators.

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  27. RUT - https://invst.ly/qn8t1
    Probably triangle X. Similar idea like the ED one more high.

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    Replies
    1. Krasi,
      Thank you again for the chart above especially done using invst vs imgur.
      I some how find it easier to see.
      I have been reading about all the stuff you talked about for about 6 months back.
      I think what sets you apart from all other EW practitioner is that you have the time element.
      I think you know that EW is a price pattern without time so you incoprated time cycle with EW which makes you stand out.
      Am I right?

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    2. Yes, time is important. I had problems trading using only EW, but now combining time and pattern it is much better.

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  28. Nikkei, Nifty, and RUT are making ending diagonal structures. So far in the 4th wave of ED.

    I know you don't like the impulse count from the highs but to me it makes the most sense for those indices. So it should be a 5th wave down to complete the C wave.

    The truth is charting SPX or NDX is very difficult to count waves. There are alot of waves that form WXY structures. It is much easier and better imo to chart the broader indices that are less tech heavy. A 2nd may retrace less than 100% in NYA but in the SPX it will retrace greater than 100%, so the counts are way different.

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    Replies
    1. It does not matter if I like it, it is just obviously wrong count.

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  29. Krasi whatg do you think of soxs and ssg

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    Replies
    1. SOX is similar to the other indexes so I would wait for one more low soxs/ssg.

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