I was searching for a pattern which allows more time to the upside. ED was one option, but I think it run out of time.... unless we have not seen the 20w low or we see 200 points decline for a week, which is not very likely.
This week I am showing another option even more bizarre:) One really ugly triangle, which I do not know even if it is valid, but it fits perfect with time and works for most of the indices so I could not ignore it.
TRADING
Trading cycle - still buy signal. Other indices like NYSE,DJ,RUT closed below MA10. Both cycles high-to-high and low-to-low very stretched. Waiting to see how a decline lower will look like. I have the suspicion the tech stocks messing up the pattern.
RSI compresed between the trend lines it is getting interesting.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - other indices and cycles suggest we have w4 so expecting higher next week to complete the pattern.
Intermediate term - the ugly triangle count in yellow. The other option w-x-y which is not much different, but different timing.
By the way for the triangle count if you measure time a+c=b which is interesting.
Long term - I think the bull market completed in 2018. Since then a bunch of corrective waves. Currently watching the pattern below wave a or x, but with corrective waves often you have to adjust so stay open minded.
We have another corrective wave which can be wave a of bigger corrective pattern or wave X and another correction to follow most likely zig-zag Y lower.
MARKET BREADTH INDICATORS
Market Breadth Indicators - deteriorating further... moving lower and divergences, which is typical behaviour around tops.
McClellan Oscillator - below zero.
McClellan Summation Index - turned lower with divergence.
Weekly Stochastic of the Summation Index - buy signal, but turning lower.
Bullish Percentage - turned lower with divergence.
Percent of Stocks above MA50 - turned lower with divergence.
Fear Indicator VIX - I think it is bottoming.
Advance-Decline Issues - broke the trend line connecting the lows so the next move up will be the top according this indicator.
HURST CYCLES
Short term cycles - difficult to count the daily cycles with the price action from the last two weeks. I would say we have a high 20d/5w last Tuesday and 20d/5w low - better visible if you look at DJ for example.
With the triangle the difference is we have 5w highs and lows and not 10w.
If the 20w low was mid July the vertical lines are showing very symetrical internal structure 4x5w cycles.
This is how the cycles will look like if this triangle is the rigth pattern. You have 20w high at the top of the first wave A, then correction begins wave B and completes with 20w cycle low(16w long 4x5w cycles symetrical in time), then another wave up C starts into the 20w/40w high. Cycles run smoothly between highs and lows from one completed pattern to the next one(as it should be).
I know from theory perspective perfect, but for trading it is just moving up so what is the point of the theory? You know where you are in the big picture and the next time theory and trading will not deviate so much. But the trading cycle(first chart) is doing fine so for trading I have to stick more to what it says.
https://www.zerohedge.com/markets/bears-capitulate-sp-short-interest-hits-lowest-record
ReplyDeleteRight on time for the top.
DeleteLooks more like a 5 wave impulse from March low. I agree with your short-term subwave count. We completed wave 4 and are in wave 5. We are at top or very close.
ReplyDeleteThe entire pattern is a double zigzag. The B wave or X wave is an expanded flat. The c wave of the expanded flat is the 5 wave impulse from the March low. You get a better picture from CV stocks like AHPI which have been following VIX. I think we will go down in 3 waves and not 5. It looks like a flat, but in reality it is a WXY corrective structure and the Y structure will be a zigzag that should take us less than 2500.
I do not agree, the move from the March is definitely not an impulse and even if it is in this flat the B wave is the strongest and fastest so this is not a flat.
DeleteGood to see we are at the end of the F wave from the WTF pattern Thanks Krasi
ReplyDeleteUnicorns!!!
ReplyDeleteThe sheeple will never learn and cheering the top again....
DeleteKrasi, you agree with the option of wave 5?
ReplyDeleteThere is no impulse it is pretty obvious.
Deletewhat's your opinion on Gold? did we top? So far the bear side has been profitable for me
ReplyDeleteI do not feel comfortable without test of the high and RSI divergence.
DeleteI does not make much sense.
I think wave 4 from 2009 will complete in Q4 this year and then we'll have a wave 5 up to at least 4000+. Q4 low will be a higher low to complete WXY.
ReplyDeleteWave 4 died long time ago. You do not have retail hysteria and bubbles in the middle of wave4.
DeleteIt should be boring and wasting time.
Well what makes you sure then?
DeleteI still think it's not the typical wave 4 because of CB intervention. Anyway the next move down should be big enough to reset sentiment I think. We'll see..
I am sure because it is obvious and I have explained why above.
DeleteIt is already too big for w4 and there is plenty of other indices to see that it is not w4.
When you mentioned big, you mean timing? I don't think 2+ years is too long a duration for wave 4. 9Y low could be end of this year.
DeleteNo, I mean size. What started in 2009 is over. There is no wave 4 and 9y cycle low.
DeleteWell regardless, the next dip is buyable whichever count you look at.
DeleteIf you look at SPX in late 1960s to 1970s, we have same megaphone pattern. Correction can take forms like this, just that it's rare. My view is we have inflation first with USD weakening into its 16YCL and then we'll get deflation.
DeleteA few days ago I saw Neely with such count expanding triangle - https://www.neowave.com/images/Forecasting-MAIN-Report.pdf
DeleteVery very strange pattern, but my cycles fit perfectly with his triangle - the single triangle legs, the whole triangle 5 years, and his whole pattern major low 18 years cycle low.
I am expecting another zig-zag down with lower low, if I am right and we see it I will seriously consider his forecast - megaphone pattern or expanding triangle as strange as it is.
I think deflation will hit first then inflation will go wild
Thanks for sharing your thoughts as always. Yes I do like your idea of deflation until the end of this decade, everything fits. But I can't help thinking that CBs will just allow deflation to happen (that's why we're getting this kind of crazy moves now). Anyway gold should have another leg up I think after this correction completes. A lot of commodities are also signaling at least a cyclical inflation cycle, so let's see..
Deletethat pattern will have most people scratching their heads if it's true. has that even happened before?
DeleteYes, late 1960s to 1970s
DeleteKrasi, your Long-term outlook (from 2018 to ??) is best represented in historical patterns by the period from 1965-1975/1982 on SPX. It's representative of what I call a multi-decade Buy&Hold Dead Zone. These Dead Zones are preceded by a 10+ year period of outsized Buy&Hold returns. 1905-1922 on DJIA is another Dead Zone. 2000-2012 SPX. Also 1929-53 on DJIA. I agree, a setup for this exists with good odds in the upcoming years--as you are suggesting.
ReplyDeleteI like Neelys triangule, months ago I upload a chart with the same pattern from january 2008 to october 2019. It is the same but smaller
ReplyDeleteSorry january 2018 to october 2019
ReplyDeleteHe means something different from this year and as wave E of bigger triangle not w4 from 2009.
DeleteKrasi, do you think we are going to the doun line of the megaphone, 2100 and then go out of the megaphone to 4000?
ReplyDelete2100 for sure after that I do not know.
DeleteWhen do you expect 2100?
DeleteNext 18m cycle low the summer of 2021.
DeleteThe Oct 2018 to March 2020 correction was wave 4 from 2009 low. It is a clear flat/expanded flat. It is a fractal of 2000-2009. At first I didn't like this because it was hard to count 5 subwaves down but it is clearly the correct answer now. Right now we are in wave 5, and likely just completed wave i of 5. I think wave 5 will be a harmonic or finish in 3 waves. So likely we finished wave a of 5. wave b of 5 will be a flat that will take the rest of the year. I think we will have a major top by Summer of 2021. The coming correction that is next likely won't go lower than 2800 imo.
ReplyDeleteThere is no impulse with three waves and wave 2 and 4 can not be the same - expanded flat.
DeleteAll the experts with paid subscriptions count this just because it is easy and obvious, which does not make it right. Plenty of indices to crosscheck - there is no w4 from 2009. Three waves into next year is nothing more than another corrective wave from a bigger correction.
there are many examples of 3 wave impulses especially ending structures. The Jan 09 to March 09 low is a good example. I don't care who makes the count as long as it's right. I initially thought that this couldn't be wave 4 because it was very fast, but the market does not look to be in a correction right now. Any dips will be bought. We will see 4000 before we see 2500.
DeleteThe public sentiment right now is the same as it was after the 2009 low. Everyone thought that's it the market is dead, the economy will never recover. There was alot of doom and gloom similar to right now.
You are just looking how to justify a count - pattern and waves and rules does not matter. Good luck.
DeleteWith the Neelys count, how do you fit the 9 year low 2024?
ReplyDeleteAnd the low of wave E in 2027?
He says 5+ years for this triangle, 5 years are the end of 2024 early 2025 exactly the 4y/9y cycle low. The first two legs are very fast so longer than 5 years is not very realistic.
DeleteSo end 2024 end wave E and also wave 4?
DeleteAccording his count yes, notice this is 4 from 2000 not 2009.
DeleteAnd the wave 3 from 1929 to 2000?
DeleteHe has completely different counts - https://www.neowave.com/downloads/articles/StockMktForecastto2060byGlennNeely.pdf
DeleteI think in other option, he said that wave D has finished soon as expected, 6 months, maybe wave D finish in september
DeleteUnicorns!!!
ReplyDeleteThe sheeple will never learn and cheering the top again....
DeleteUp and up, it's looks so strong, like 3w, nothing can stop it and you say it's corectiv
ReplyDeleteIra Epstein mentioned that some construction workers came to his house and they mentioned they were trading. He said "everybody seems to be trading". Construction workers - the new shoeshine boys?
ReplyDeleteConstructión workers, the new unicorns.
ReplyDeleteOr the same old bag holders as always... it is never different.
DeleteThe expected impulse is nearing completion - https://ibb.co/FWrF0ph
ReplyDeleteAs expected? Other than this week you've been calling for a lower move for months. You are misleading unsuspecting traders with your bias. EW does not work and constantly adjusting your count and moving the goal posts does no one any good. The benefit of hindsight in none.
DeleteOooh lines up with gdp tomorrow. I probably shouldn't get my hopes up, but I will
DeleteMaybe you should pay more attention that I was looking for 20w low not reversal and the move continues higher into 40w high.
DeleteYes I agree, how many times, after 50% market up and still you are saying market go down and cycles matter. I think you wrong and wrong big time.
ReplyDeleteThe same bullshit like a few months ago - traders learned nothing.
DeletePattern and cycles are all that matter and all this great strength will be gone retraced again.
The same strength which makes you feel confident is the guarantee it will happen. Speed and size of this move is a guarantee it is not sustainable and it will be retraced.
Why the anger? You're partially correct. Yes, there will be a reversion to the mean but until then, don't fight the strength of this move. There will be plenty of indications the reversion is under way but don't be fooled by your bias
DeleteThe same like a few months ago - relax we will see it when it reverses.... no one saw anything and poof it was gone.
DeleteDo not fight, the same will happen again don't be fooled by your bias.
That is the very point, I don't have bias
DeleteEveryone has bias and yours is clear FED blah blah.
DeleteI'm bias to information
DeleteOne must understand the Fed has destroyed any and all price discovery, including EW. Markey generated information such as option chain inventories, Vix products, delta neutral trading and market psychology are the catalyst
ReplyDeleteThe same bullshit like a few months ago - traders learned nothing.
DeleteEW and cycles do not work until they work.
One must understand pattern and cycles are all that matter and FED is irrelevant.
All this great strength will be gone retraced again and FED can not do anything about that.
The accuracy of wave counting depends upon the practitioner. Neely has been right since April 6 about this rally. Looking back, some of his posts since then are like looking into a crystal ball.
DeleteThe problem with EW is so many try to look like experts and 99% have no clue what they are doing. So regularly wrong and the masses think EW does not work.
DeleteJust look at all the experts with paid subscriptions and you will see the epic failure - they can not make a difference between impulse and zig-zag twice in row.
I am not an expert, but I stick to the rules and corrective move is corrective move period.
I do not know where Neely posts, I have just saw his long term count on his page - crazy but it fits perfect with my cycles. For the third leg I agree after that we will see:)
Fed is irrelevant? This move is not driven by fundamentals, central banks are back stopping the market until they decide to sell and repeat
ReplyDeleteI do not care why it is happening if it is the FED or some one else. All I need is to see their fingerprints on the chart. So yes FED is irrelevant for me.
DeleteI do not care about your interpretation or my interpretation what FED is doing. I care only about charts. Anything else is just an excuse to justify or personal bias.
Market generated information is important, ignoring it won't prevent it from being a factor. I do appreciate your efforts though.
ReplyDeleteGold wave 3 of 3 on it's way today? DXY reversing
ReplyDeleteI still think we should see final high so probably in w4.
DeleteI see - so today may be 3 of C then?
DeleteNot sure it can be triangle...
Deletethanks, there's an important channel trendline near 1860-70ish which we have not tested since breaking out. I'm assuming we're going to test it. Maybe there I go long
DeleteMarket will get hammered dont be a sucker
ReplyDeleteThis time is different:)))
DeleteWhats different
DeleteI was joking:) Of course it will be smashed, what goes vertically higher comes the same way lower.
DeleteHi Krasi, are you short now or would you wait for a breakdown first?
DeleteIt is interesting to see VIX rising when indexes are going higher
No, I want to see RSI divergence first. I think there is one more high.
DeleteQqq price projections have been met
ReplyDeleteKrasi uvxy is hard to predict what is your target downside and up side
No idea, not much left to the downside if at all and higher at least to double.
DeleteWhat I see at the moment - https://invst.ly/ryfw9
ReplyDeleteDJ chart because it is showing perfect Fibo measurements. SP500 the same count, but not so good Fibo measurements. By the way AAPL has exactly the same pattern from the end of July - impulse with extended first wave - the AAPL market:)
The same w-x-y count seems to work very good for NDX too - https://invst.ly/rypbn
DeleteSo what the destination of the s&p?
ReplyDeleteThe same destination like NDX and DJ.
DeleteOne wave Up.
DeleteAny idea on IWM? Looks to be finishing with an ED.
DeleteMaybe it has completed a-b-c/Y and just waiting for the other indices to make a top.
Deleteapple nice little triangle
ReplyDeletewe close to that mammoth trendline from 2009, here's the last bit https://imgur.com/gallery/iNZPtfk
ReplyDeleteSo in fairness to Lady S. and other bulls, are You participating in this downturn? If so, what was your trigger or your signal? Are you short? I ask this not to troll but to learn.
ReplyDeleteHow far do you see this going, and do you see a rebound?
Finally do you have a price target for UVXY?
Thank you