Trading cycle - sell signal was triggered. Just slightly below MA10 for the moment, most likely after retracement on Monday we will see convincing red bar below MA10.
It seems the daily cycle is running shorter, if it continue this way the low should be in 2,5-3 weeks. Cycle with normal length like 45 days will shift the odds that the alternate scenario is playing out.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - on Thursday we saw slightly higher high to complete impulse for (c)/b and zig-zag from the 29.June low. Now we have completed pattern and wave c should be running. Two possible targets for expanded flat wave c are shown 138% and 161% extension. The indicators MACD/RSI broke the trend line lower after divergences confirming move lower should be running. The alternate pattern is in red - wave Z
Intermediate term - divergences on all indicators, we should see sell off. The 1,618 extension for wave c of expanded flat is perfect hit of the 38% retracement so it looks interesting as a target for the decline.
Long term - I think the bull market completed in 2018. Since then a bunch of corrective waves. Currently watching this pattern... but with corrective waves often you have to adjust so stay open minded.
MARKET BREADTH INDICATORS
Market Breadth Indicators - turning lower with divergences, which is usually a sign for a top.
McClellan Oscillator - below zero.
McClellan Summation Index - divergence.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned lower, divergence.
Percent of Stocks above MA50 - turned lower, divergence.
Fear Indicator VIX - double bottom, we should see spike higher.
Advance-Decline Issues - turned lower, divergence.
HURST CYCLES
Short term cycles - it looks like 20d low on Monday and now the 40d cycle turning lower.
Week 18 for the 20w cycle. We should see a decline for 2-3 weeks to complete the cycle. Alternate late June was 20w cycle low and we are seeing M pattern aka double top similar to Jan-Feb.
Long-term: I think this is still wave 4 correction that started in Oct 2018. The C wave is very complex and it is an expanding diagonal. We are in wave 5 of C. The bottom should be in late August, then we start wave 5.
ReplyDeleteDon't look at Nasdaq or even SPX because the strength of tech stocks is missing up the count and you won't see obvious expanding diagonal forming. Look at NYA, RUT or even Dow Jones.
Also, I think wave 5 will have divergent highs between DOW, RUT and NDX, SPX. DOW and RUT may not make new highs while SPX and NDX I think will
DeleteThis is what I mean:
Deletehttps://imgur.com/a/51bHnDY
Basic rule - w2 can not make a high above w1. This is a wrong count.
DeleteLook at RUT, NYA, even Nikkei. You have to be flexible and can't be so rigid with counts. The market is not going to be like the textbook.
DeleteBraking rules and picking indices will not make it right. The fact that you have to do it is a guarantee that it is wrong.... from experience when you try to make something look right with 99% it is wrong.
DeleteIf you want to play with expanding ED wave C try with XOI/crude oil to see how proper w1 and w2 should look like... and not making them up to fit it in something what you want to see.
Thanks Krasi as always. It's interesting that you put last Monday as the 20d low (which makes what you're looking for, i.e. a 20w in 2 weeks much more likely).
ReplyDeleteI have 10-Jul as a 20d low and yesterday (Friday) as a likely 20d low. This also means the correction can last longer. But yes last Monday as 20d low also makes a lot of sense now that I look at the charts again. And it agrees with what I think would be a likely outcome of a bear flag on the upcoming Monday before we begin the big sell off.
On a side note, EURUSD is approaching 12year resistance trendline (and inverse support trendline for DXY). Bonds about to breakout from congestion area. The setup is looking good now.
Can you upload a chart of eurusd with that resistance trendline?
DeleteJust look at the monthly chart and draw a trendline connecting all the peaks in Mar'08, Apr'11, May'14 & Feb'18. It's pretty obvious.
DeleteTo verify somehow the 20d low you need to look at intraday charts 5d cycle low FLD interaction etc. I do not have software to do that. I am relying on interaction with MA10 around 14 trading days. That is why the count about - two interactions with MA10 within 16 days for 2x10d cycles. I can not guarantee it is right.
DeleteOverall looking the other assets trend change is coming, but it is similar like the indices this could be the top/bottom or in few months.
Thanks Krasi for sharing your thought. I'm still keeping with the count that 20d low is either last Friday or upcoming Monday as the count looks better with /YM and /RTY.
DeleteThis move up since March has the feel of 2019 again, which is bad because I was hoping for a proper correction to reset sentiment so that we can have a resumption of the bull market. I'm hoping we do get a deep wave 2 soon in /NQ, then there's still some hope the bull market is still alive. The Fed intervention has really put an end to this bull market prematurely, once in 2019 and again this year.
The vertical moves are not sustainable they burn the fuel too fast and die fast. Because of this I was not bullish in 2019 or now and I was not bearish in March. Beware of the slow moves taking time.
DeleteLook at NDX at arithmetic scale from 2009 it is very interesting - four rallies higher, each one getting shorter and steeper, the last one reached vertical 90 degree angle. All four rallies with the same size 3500 points(the last one overshot the target normal for final mania phase) and every subsequent rally taking roughly 38% of the time of the previous one 7y->3y->1y->5m.
When I look at the chart I am afraid the FED burned the whole fuel. I do not see how this is the beginning rather this is the end.... unless we see fifth rally 3500 point for 2 months into the October high:)))))
Very interesting. I usually use the log scale for longer term trend. Even so I noticed there's a possibility that this is could be a blow-off top in /NQ. If you go to log scale, you can actually draw a very nice upper trendline connecting the peaks for the last decade. This trendline has marked the tops very well during this bull market, and it's supposed to be at ~10,400 thereabout now. I tried to short at this area few weeks back but was stopped out and it really surprised me that the resistance just blew off almost effortlessly. It could also mean we're entering into the final parabolic phase of the bull market, but to sustain it we'll need a proper correction, either time-wise or price-wise. Otherwise this could just be a blow-off top.
DeleteKrasi if SPX could arrive to 2850 what could be the downside target for OIL?
ReplyDelete38% retracement around 30
DeleteTarget for uvxy?
ReplyDeleteI would say around 45.
DeleteThank you.. i was also thinking $40-$50..
DeleteLovely piece of analysis tying the pieces together. Can't wait to see how it pans out.....
ReplyDeleteOkay, so you don't agree with my expanded flat. That is understandable. I still think this is a primary cycle wave IV correction from 2009 low and it could be a WXY correction starting from Oct 2018. The Y is making a flat or expanded flat depending on if we make a new high in the indices. We are in B of Y, and likely completed it last week.
ReplyDeleteOr the bull market is over one wave W is completed and X is making a flat or expanded flat depending on if we make a new high in the indices. We are in A of X and B will test the low.
DeleteWave 4 has it's personality and it does not brake trend lines and it does not push market breadth to extreme fear like 2008... like VIX 85. This is not how w4 behaves.
Your words ignore SP500 - so ignore it and take DAX or NYSE draw simple trend line, count to five and explain me how this is wave 4 from 2009.
The way you count it a/y/4 is bigger than w1 or subwave of subwave is bigger than primary wave.
DeleteThis is clear degree violation or simple said wrong count... I know that rules are very "flexible" for you, but they are still in force. This is how charlatans like Avi Gilburt count EW.
Yes, and I guess you think the 2008-2009 crash was a supercycle wave 4 crash (equivalent to 1929 crash), since it was bigger than any previous correction since 1929, right?
DeleteThere is no rule that says wave 4 can't have elevated VIX of 85. Was 1987 a bigger than wave degree correction than 2009? THe VIX or VXO at the time was much more elevated.
You are making up rules, while at the same time saying rules are still in force.
Count what you want I do not care.... you see what you want to see.
DeleteI would like to think that Technical Analysis is a form of art rather than science with hard and fast rules. Many people has different interpretation of it, and each interpretation has its strength and weaknesses/"blind spots". I often see some things very clearly that others don't, and similarly others sees some things that I find strange (does not comply to my trading system) and yet they were later proven right.
DeleteI think it's pointless to argue about this. Just apply what works for you and find your trading edge. It good to share ideas, this is what this blog is for. Also there's nothing wrong to have disagreement, this is what makes the market anyway. Important thing is we keep refining our trading approach so that we can fully exploit our trading edge.
I ask what is your view on market? where it is heading in next 2 weeks, 2 months and 2 years? Thanks
DeleteGold has gone bananas
ReplyDeleteIt is normal at 9y cycle high and important turn the top of B wave.
DeleteEverybody must "buy" the new great trade.
Hi Krasi. I'm just trying to understand. Why is it not possible that we're in wave 3 now, and we'll have another wave 5 later to complete the 9YCH?
DeleteBecause the pattern is clear corrective structure there is no impulse.
DeleteBingo on the money Krasi - wonderful call
ReplyDeleteIf gold is 9 year high, we should go shorts?
ReplyDeleteIt is your decision. I am concentrating only on the indices.
DeleteFor starter wait for RSI divergences on the daily chart, if you want to short.
looks like gbtc is running higher to top with everything else .. i see $14k-$15k short term?
ReplyDeleteLooks like a B wave with a C coming. I wonder if Krasi feels the same. Target for me was 11400 and we hit it today.
DeleteI think more to the upside it feels like in the middle of a second zig-zag from the March low.
Deleteshorted gold here, not sure if top, but i'll take a stab at it
ReplyDeleteA little bit too early... I have the feeling everything will align indices,USD,PM and turn lower around mid August.
Deleteyou think the indexes will make another high? It's hard to read it right now
DeleteLike this for example - https://invst.ly/rl6o9
DeleteAh ok interesting, looks good
DeleteSo 5w low this week?
DeleteMore likely next week.
DeleteWhat will be the target for the eur/usd in turn lower of August?
ReplyDeleteFirst target the last low around 1,07.
DeleteThis comment has been removed by the author.
ReplyDelete8 june was 10w low?
Delete8th of June was 20w high.
DeleteKrasi are you thinking next market selloff finished in 2.5 - 3weeks time or sell off only starting in 2-3 weeks time? Thanks
ReplyDeleteThe current decline should last only 2-3 weeks...
DeleteStill think your "Z" is possible to 3350 https://invst.ly/rm008
ReplyDeleteFirst the correction then something y z or c what ever for completed pattern.
DeleteBut you say the pattern is completed
ReplyDeleteCompleted for a turn lower into 20w low.
DeleteThis mofo better sell tonight and tomorrow
ReplyDeleteShort term cycles DJ a little bit better visible - https://invst.ly/rma0y
ReplyDeleteCycles running pretty consistently.... which means the low should be the end of next week.
When was the last 10w low ?
ReplyDeleteIn May
DeleteThe current one 12-13 weeks ?
ReplyDeleteIt seems so.
DeleteDecent start to the C wave .
ReplyDeleteAgree on the timing Krasi - the low to coincide with next Friday's payrolls . 2920/30 would be perfect , but clutching at straws with that .
The final rally thereafter into 20 August before your coordinated sell-off into the early fall.
The problem is we need break below 3200.... and time is running out.
Deletedoes this feel like C? I thought C's had very little bounces to them after each wave down. I guess we'll see later today/tomorrow if there's follow through.
ReplyDeletewhere's my C???? F#ck
DeleteOn Tuesday it was clear that c is unlikely... taking too much time.
DeleteWatching the alternate scenario.
Dont fight it guys, NASDAQ looks great for more all-time highs.
ReplyDeleteInteresting everybody is smart after the fact. Where were you in March?
DeleteNo, we will not see another ATH until the correction is over.
Hi Krasi,
ReplyDeletewhat do you think about the german DAX? Could the TDST support at 10660 level be a likely target for next week?
https://www.tradingview.com/x/YaaC6tmF/
Thank you
... what level could be the low and time frame?
DeleteThank you
This looks too much for one week... more likely 11600 there is support there.
DeleteThank you
Deletehttps://invst.ly/rmqbu feeling better
ReplyDeleteNDX too looking like a-b-c higher according to RSI and testing the broken trend line - https://invst.ly/rmrr8
DeleteWe will see if it holds or not.
If it turns lower as expected what is the NDX target for you>
DeleteIf it is just a corrective move lower around 10200 - support/MA50 and y=w.
DeleteDED! all hail the bull trap!
ReplyDeleteSpeak too soon?
Deletei hpe not, but if it gets over 3250 I'll take profits for the day and assume 3350 is on the table....
Deletestopped out - Krasi - Z in play now? I can't see this was a retrace today.
ReplyDeleteYes, the alternate pattern with a high in the next weeks and lower into November looks much better.
Deletecool, yeah I got out of shorts for the weekend. Looking forward to your update and have a great weekend.
DeleteGap down open on Monday.... that's normal after an hanging man candelstick on daily chart.
ReplyDelete