Jun 20, 2020

Weekly preview

Four days mess, still waiting for the market to make a decision. From pattern perspective one more high makes more sense.... but even if we see higher high I doubt it will last for a long, just to see divergences and to turn lower. Trading signal and cycles - it makes more sense if we see continuation lower.... but time is playing for the bulls.




TRADING
Trading cycle - the sell signal has not been negated. The price hanging for several days around MA10, but did not close above it and RSI is still below MA18.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it is difficult to see completed pattern and reversal. You can try with b(red) triangle, but the futures did not make higher high for c. Maybe some corrective pattern b(green) and we will see a high next week for c.
Even if we see continuation it looks like another zig-zag with long and shallow b wave - most bullish scenario 3/C ED running.
All we can do is wait until we see clear pattern or break below 62% and MA200.


Intermediate term - RSI shows this move up is living on borrowed time - either we have a high and test of the broken trend line or higher high with divergence coming.


Long term - I do not see an impulse higher so changed the alternate scenario from completed wave IV to wave A with a/B completing and b/B until the end of the year. The yellow pattern is adjusted for time with all the 20w/40w/18m cycle lows and highs, it is not just random lines.


MARKET BREADTH INDICATORS
Market Breadth Indicators - do not show some strong momentum higher just some ticked up briefly.... rather weakness.
McClellan Oscillator - below zero.
McClellan Summation Index - small double top?
Weekly Stochastic of the Summation Index - still in overbought territory.
Bullish Percentage - turned up from 70 but below the MA and turning lower again.
Percent of Stocks above MA50 - turning lower again, but still above 75.
Fear Indicator VIX - cooling off as expected.
Advance-Decline Issues - is heading lower below zero.


HURST CYCLES
Short term cycles - we have 40d/5w low as expected and 10d cycle high. The question is will we see another high next week for 20d high before continuation lower.


Week 13 for the 20w cycle. I think we have 20w cycle high, but RSI has to confirm it breaking below MA9.

106 comments:

  1. This is a long-term picture question. Do you see a great depression 1929 style crash/deflation even coming soon? And do you see bank runs like those in the early 1900s?

    Thanks.

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    1. I think we should see alternation which means prolonged, but more shallow depression compared to 1929. I suspect it has already began.
      I see one deflation phase lasting 2-3 years at the end of the decade, followed by huge inflation.
      It is possible that banks go bust and we see bank runs, but I guess the problem will be "solved" with even more paper money(which will cause the huge inflation).
      Choose carefully the bank where you hold you money, diversify in different banks and assets, and hold cash to meet your needs for at least 2-3 months.

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  2. Here is long term TSLA chart - https://imgur.com/a/NwK6ezn
    We have bad looking RSI divergence on the weekly chart and exactly the same for AAPL,AMZN,FB,MSFT.
    From the low in 2019 we have a move which looks like a zig-zag and exactly the same for AAPL,AMZN,FB,MSFT.

    I am wondering..... lower until the end of the year(above weekly yellow) will fit perfect and overall ED until mid-2022 for 4y cycle high will fit perfect too.

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    Replies
    1. But if july is 4 years low, in december will make another lower low?

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    2. This is the alternate idea that the low was in March with the next significant low the end of the year - the hint in brackets yellow weekly chart

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    3. Or this is already w3 of the ED and next is w4 higher low until the end of the year.

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  3. Thanks Krasi. Several indicators that I'm using are already indicating that this daily and intermediate cycle high are behind us (as difficult as it is for me to believe since we just started a bounce last Monday). We have stayed 7 days below 10dma, daily histogram dips again, daily MACD 9EMA has turned sharply down implying a left translated daily cycle. If Monday closes down, it will be an even stronger confirmation. I'll start to be aggressively short on the next 5-day cycle bounce which should happen next week. I also think another c-wave high will be better, but the weakness that we saw last week makes me doubt if this will happen now.

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    1. I am thinking the same - time(cycles) points that the direction should be lower, but at the moment I can not confirm it with price pattern so I am cautious.
      From trading perspective it is better to see one more run higher, but I have the feeling we will not see it - it takes too long 3-4 days to continue higher, which signals weakness.

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  4. Futures after hours melted down hard. I'm looking forward to Sunday. Thanks as always Krasi

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  5. Thanks for the update,please can you post a chart of Oil like the chart posted of Tesla?

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    1. Something like that A-B-C with expanding ED or W-X-Y - https://imgur.com/a/dS8NuVR

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  6. Hi Krasi, there is already a lot of paper printed in the last few months. Why wouldn't that trigger inflation over the next few years but it would do it the next time.

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    1. as my friend said the following

      “Inflation requires technological advancements, population growth, shortage in labor supply, productivity growth to all work together...”

      “Cuz they think printing money by itself causes inflation like some countries in Africa for example or Venezuela ..”

      USA is diff i suppose..

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    2. The debt tsunami is so big that a few trillions do not make any difference.
      The system will clean up - we will see defaults and deflation. The CBs do not have a chance against nature, all they do is postponing this moment and making it worse as it should be.
      After that all that paper money will cause huge inflation, they will never stop.

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  7. If we don't see an impulse lower to <2800 by this week, I'm going to have to agree with the alternative yellow projection.

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    1. Time is pointing more and more in this direction with this one week doing nothing....

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  8. As much as I don't like this count https://twitter.com/GregaHorvatFX/status/1271431649998356480/photo/1, because (c) of iv is way too fast compared to (a) and (b) which took minimum 3 months I'm going to have to lean towards this because the market has been very bullish lately.

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    1. I meant short as in short in duration.

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    2. Grega Horvat another "EW expert" just pasting labels and selling subscriptions.... Avi Gilburt number 2. Saw long time ago and ignored.

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  9. This is the two possibilities I see - https://invst.ly/r7inu
    Either w-x-y completed b and now c running or expanding ED for c.
    Waiting for more information, to see if the wave up zig-zag or impulse.

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  10. Krasi uvxy likely to 32 first? Your thoughts

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  11. Gold maybe double top today, been waiting for that thing to fall too

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  12. I think we have one quick drop to the 200 week MA hopefully before July than bottom. I don't see us testing the lows again, and I think this is not a C wave from the June highs that goes down in 5 waves, but a zigzag. We already had the first A wave and now in B wave, that should be complete soon if not already and a C wave will go down to tag the 200 week MA.

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    1. Yes, it looks like the indices are heading for 20d high just wasting time, which means the yellow scenario is more likely.
      It will last into July. The A-B-C, which you are referring, is just the first leg of the correction.

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  13. The move up is developing as a corrective pattern - https://invst.ly/r7xg5
    Either a-b-c with c as expanding ED or w-x-y. Two Fibo measurements point to slightly higher high 3160 for the cash index 3170.
    Today is day 11 high-to-high it seams the indices are heading higher for 20d cycle high.

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  14. Krasi, what about the Nasdaq?
    can you give us the graph? It's almost touch the upper lin of the canal from 2009

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  15. market needs to drop today - I sent a memo to fauci before he speaks today.

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  16. nasdaq in 3 of ED for c of B?

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    Replies
    1. It is possible, I have noticed the same for the SP500 - https://invst.ly/r81uj
      The cash has no such plunge... maybe simple impulse.

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  17. looks like C completed on SPX. The Krasi has spoken

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  18. Possible triangle - https://invst.ly/r88oc
    Works for the futures and the cash index and many other indices so that everything is in sync.

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  19. I don't see any triangle in the Nasdaq

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  20. But if it is triangle could return at double top?

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    Replies
    1. Why? It is triangle for b or 2 and continues lower with 3 or c.

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    2. A triangule never is a wave 2

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    3. I have not heard such rule.

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  21. Krasi what's your outlook for UVXY in the next week or so
    Thanks

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    1. Probally 29 to 30 then 40thst my out look

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    2. And for July to 80-100?

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    3. Lets see the close today. If we do not see close at the low for the day one more time lower 28-30 then 50-60. Bearish close higher 50-60.

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  22. I stay short, possible E triangle but also possible 3 of 3 starting for C. I don't wanna miss it.

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  23. Krasi, when was the last 5w high?

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    1. The last high 8th of June.

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    2. Interesting that SPX and DJIA still have not been able to close the early June daily island reversal gaps. NSDQ and R2K have though.

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  24. Futures will be entertaining. I think we'll gap down :)

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  25. Hi Krasi,

    I am a bit puzzled by the current move down. It has taken way too long and the drop today appears exhausted after first few hours of trading. Not what I would expect on a thrid wave. The triangle appears live and well at this point. What do you think?

    - Kali

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    Replies
    1. If there is more to the upside it is not a triangle, but correction b/x has been completed today and c/y higher should begin tomorrow. We need to see what happens next - corrective zig-zag or impulse to confirm reversal or more to the upside.
      There is no technical damage at the moment so b/x today is possible.

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    2. Watching w-x-y and if we see impulse higher switching to b - https://invst.ly/r8o60

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    3. there's no bull divergences yet on smaller time frames

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    4. I do not know something bothers me with this decline... somehow it does not feel right.

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    5. there's hidden bull divergence on the daily chart, maybe that's a hint. Wasn't really a waterfall sell for 3 today https://invst.ly/r8oxg

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    6. For SP500 you can say ok w-x-y with y at the same level like w, but look at DJ or RUT - https://invst.ly/r8pbd
      No idea how to call this strong impulsive move lower.... it looks more like bullish flag.

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    7. Yeah, and now with the double bottom on futures you have hourly bull divergence. I went long. thanks

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  26. Flags are not usually that large, more of a channel

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  27. time is running out for wave C to 1800-2000

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    Replies
    1. Maybe... but I still think we will see big decline 15%-20%

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    2. Yes, I have the feeling it will jump one more time.... if we do not see continuation lower today or tomorrow.

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  28. Yes Krasi but time is also running out to form a higher 5w high. This 5w should be left translated, so it has to move up now, or something more bearish is developing.

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    1. In the bearish case the 5w low was last week and he index already turned lower.
      In the bullish case the 5w low was yesterday day 29 with theoretical length 28 days. In reality it is shorter, but the previous 10w cycle was very short so it is expected the next one to be a little bit longer. The next high will be another 5w high and left translated with 3-4 weeks correction.

      Short said with cycles both cases will work.... again we have to wait 1-2 days to see the price behavior.

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  29. Looks bearish at the moment. People are calling a retest of highs when we just started the move down? Doesn't make sense. More likely I think is we see a 10-15 drop from here.

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    1. It is down until proven otherwise, but it is suspicious because there is no any technical damage... and overall the pattern is strange and suspicious.
      If you see a second green day tomorrow, with high probability there is no move down.

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    2. can you clarify this Krasi? you mean high probability that there is no re-test of March low anymore?
      are you now saying scenario for move lower would be limited to a higher low say ~ 2700/2800?

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    3. Yes, this looks more likely... but this is not good it is much worse. In this case the bull market is over and we are watching topping for several years.

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    4. Hi Krasi, if there is no test of the low, why/how does it imply that this can be topping for several years?

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    5. Because we see corrective moves.

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    6. Thanks Krasi. I am still keeping the faith.

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  30. maybe they are keeping it up to punish dip buyers overnight

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  31. Rally at end wasn't surprising, However, NQ just tested it's upper channel. Futures may be a sell. https://imgur.com/AMVysMx

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    Replies
    1. I suspect this for NDX - https://invst.ly/r95-9

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  32. I'm sorry but i still feel investors / traders alike are way too bearish for it to go down, buy dips will work a little longer in my opinion.

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    1. could be right, but I remember many people saying similar things when SPX was near 3400

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    2. As I said such statements "investors / traders alike are way too bearish" are nothing more than personal perception to justify bias and does not mean anything.
      I will say the opposite the traders are crazy up up no correction.
      Do you have data to show the opposite?

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    3. How about the last AAII survey that showed only 24% of respondents were bullish and 49% were bearish? Thanks as always for your insights.

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    4. You have to look at what people do, not what they say (AAII). They're buying calls based upon the put/call ratio.

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    5. Not to mention that most people invest passively these days. They may have their 'opinions' but they keep making contributions to their 401k's.

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  33. But if in july only go down to 2600-2700 can be the wave c of a triangule as wave 4 from 2009, the next year wave 5

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  34. from 9 june look like a triangule, now wave c or d

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  35. It's wave 3 down now. The move in the middle of this week was impulse 1 down.

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  36. Completion of the ABC down from the 3230 high ?

    A=C would be the max early next week , then retest of the 3230 area with new highs for ndx .

    Needs to close below 2971 es today or bears will be toast next week.

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    Replies
    1. I think b wave is running for a zig-zag higher. The question is if we will see a new high or lower high.

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  37. Replies
    1. Something like that... up into 4th July and sharp decline 2-3 weeks for intermediate low.

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    2. go down to 2600 62% from march?

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    3. More likely 50% to support levels around 2750

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    4. for wave C of triangule from 2009?, march A, this one B. I still expect wave 5 next year to 3800-4000

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    5. I think the bull market is over we are seeing another B wave of higher degree compared to 2019.

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  38. feels like green coming round the corner

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    1. Triple bottom with hourly bull divergence. Long seems correct here https://invst.ly/r9g9j

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  39. US junk bond sales today set an all-time monthly record. No risk taking what-so-ever these days.

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  40. I see a problem with the yellow count, the wave B would last too much for the A

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    Replies
    1. like this:
      https://prnt.sc/t73xvs

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    2. You are lucky, I have already made the long term chart for the weekly preview :)))

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    3. There is no triangles and the bull market ended in 2018. I have changed the chart this B wave will be completed in October.
      You are counting clear zig-zag as impulse. Trying to predict triangle when you have not seen at least four waves is doomed to fail. It does not work for may other indexes. The leaders tech stocks with monthly and weekly divergences.

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  41. Krasi, looking forward to your update!

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