Oct 31, 2020

Weekly preview

Well the market creating a lot of confusion with the decline this week... I still think we have a topping and the decline has not begun. Just maximum confusion before the top.

A lot of confusion because at first look there is many possible patterns from reversal to intermediate low and the rally resumes. My opinion is we have not seen the top and we need one more move up even if it is a lower high.


TRADING
Trading cycle - sell signal. The last high and the current low are just half cycle high and low. They are not pattern high/low, they are legs of a bigger pattern. This "fake" M10 crosses occur in sideways pattern like triangle and flat and I susspect this is what is going on.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it looks like impulse, but I think it is another corrective pattern. For impulse we need to see waves 4 and 5. NDX,RUT are not even close to something like impulse, so I doubt we will see this waves 4/5.


Intermediate term - the perfect pattern will be to see one marginal higher high. It will create maximum confusion, it will trap both bears(now convinced in reversal and giving up at higher high) and bulls(the market always going up) and it will fit perfect with cycles. So main scenario flat for g diametric or Z, alternate weak bounce to complete triangle Y or g with lower high.

The leg lower is longer than the previous leg up without fully retracing it. This is not how reversals look like.... despite that what else could it be:
The bullish view is this is a flat from the September high - there is no impulse so far for c, the b wave is the shortest which is not allowed, completes at 5w low, in the middle of nowhere concerning time.
The most bearish view - impulse lower since the September high.... I will not even comment this nonsense - just look at NDX and RUT great start of the third wave.
Another lower high for g diametric or Y triangle - possible, but it will be a weak move higher and not create enough euphoria to trap the bulls.


Long term - the bull market completed in 2018. Since then a bunch of corrective waves. Currently I think this rally should be a corrective wave of a bigger pattern most likely triangle. Look at NDX we have corrective wave which is 1,618 bigger than the previous one which could be only b of a triangle. I think the best looking pattern is Neely's triangle. Wave C should begin soon.


MARKET BREADTH INDICATORS
Market Breadth Indicators - turned lower some with oversold levels so something higher is comming at least short term bottom.
McClellan Oscillator - oversold levels.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - trying to turn lower.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - almost reached 25 level.
Fear Indicator VIX - should pullback lower for another higher low.
Advance-Decline Issues - some retracement higher expected.


HURST CYCLES
Short term cycles - it looks like 5w low so next we should see move higher for 5w high. Interesting is the last two 5w cycles high and low are asymmetrical and look similar - 10-18 days for a high and 16-9 days for a low.


Week 5 for the 20 week cycle. For now sticking to the plan that late September was 20w low and we have not seen the 40w high.

71 comments:

  1. You are a great elliott counter.

    Thanks

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  2. look at DAX. Looks like an impulsive wave 3 or C to me. I don't think we bottomed yet, so it's premature to call a reversal or bottom here.

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    1. Look at NDX clear corrective wave. Why should DAX be more important than NDX?
      Since when is DAX leading indicator?

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  3. 40w low in April?

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  4. I think the 5w low will be the next week or the next one.

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  5. Krasi, thank you much for this week's update. Would you have a short-term (1-, 2-, or 4-hour) chart that illustrates your current projection of wave g of Neely's diametric? If not, no worries. Thanks again for manning a great blog!

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    Replies
    1. It is useless it will be wrong... we do not know even if the move down is complete it could take another 2-3 days.

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    2. We have something to work with... if wave 1 is running and if you project classical impulse it will look like this - https://invst.ly/sollp

      Interesting is it completes between the two previous highs exactly where a flat should complete.

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    3. Thanks much, Krasi! I just can't believe the crazy election period we Americans are about to experience is not going to blow the markets up soon.

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    4. Your chart is EXACTLY what I was looking for - just a broad idea of what the short-term waves might look like. A appreciate your efforts.

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  6. Krasi, who do you think will win the election?

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    1. Trump and then chaos will follow - the deep state furious losing for second time.
      This will be the excuse why the indices will fall 40% or more again.

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    2. Biden win would also cause chaos for the markets. No doubt big tech and large investors will be hunted down for enormous amounts of taxes. Also more taxes on capital gains won't help attract people to the world's largest casino.

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    3. I agree Krasi.. i think will be big win, Dems will contest it just to make life harder for us but tell us they care about us..

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    4. Roberto i disagree.. Kamala is tech friendly.. her bro in law chief legal at Uber.. formerly part of Obama crew.. remember when Obama in office Google had free reign...

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  7. Krasi if the will be chaos strat after the election do still think we will have g wave up to3600 region

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    1. The winner will not be clear for another week or more after the elections.
      If we have a flat the perfect date for a top is between 13-18th of November.

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  8. Good luck tomorrow Donald Trump, show the world who is the best, a fan from Spain

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    1. Por muchos anos yo pensaba que Trump era poseido por el diablo, pero yo estaba equivocado. El ES el diablo.

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  9. I don't think 3 is done yet. Maybe tomorrow when Marianne williamson wins

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  10. Chuppa Sobakko EmvecillNov 2, 2020, 9:22:00 PM

    I think the election winner as Steven Spielberg

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  11. Look at the DJ it is very unlikely that this move up is wave 4 - it looks like impulse,it has retraced 50% from w3, RSI making higher high above the high for w2 - https://invst.ly/sp136

    If we assume this is w1 and extrapolate classical impulse it completes exactly where it should. DJ made lower low so expanded flat completing with marginal higher high.

    With high probability the move lower is completed. For traders wait for pullback with higher low and nice ride up should follow for a few days.

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  12. My problem is the dollar chart, it broke out strong and has retraced nicely overnight. So I'm not sure that rally is over yet for dxy. Well, I'll just wait. Thanks Krasi

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  13. This looks like impulse for 1 or a to me - https://invst.ly/spffm

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  14. When did the bull market end from 2009? I have some fractals that show we completed the bull market in Jan/Feb 2020 and we are in a multiyear correction.

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    1. According cycles 2018, from pattern perspective if the expanding triangle is the right pattern the high was Jan/Feb 2020 with 4-5 years correction to follow.

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  15. https://bolsayciclos.wordpress.com/2020/11/03/sp-500-ciclo-40-dias-40/

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  16. Krasi, don't you think we start a new sycle up for new ATH?

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  17. Look at the vix, their is no fear

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    1. VIX at 30 and building a base at 25... and there is no fear? What are you smoking???

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  18. They are going high very fast

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    1. Read the analysis above. There is nothing new to add.

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  19. I read it, you say they are going slow, but for me it's fast and strong, 4 percent a Day, amazing

    ReplyDelete
    Replies
    1. Not reading at all "create enough euphoria to trap the bulls".
      Look at you - mission accomplished.

      Delete
  20. you were right Krasi! Bravo. I wonder if today will be the high before the big move down? DXY still holding over it's low from last night and looks ready for more.

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    1. I doubt the cash index shows 5 waves up - either one more wave up for double zigzag or this is just 1/a. The futures look corrective now like a-b-c...
      At least another 1-2 days.

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  21. 3 waves up for d of the triangle , e down tomorrow then boom

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  22. Interesting with 100 points higher I would expect the McClellan Oscillator to explode higher instead it is down for the day..... a few stocks masking declines for the majority.
    https://stockcharts.com/h-sc/ui?s=%21MCOSIRSPX&p=D&yr=1&mn=6&dy=0&id=p46143686215

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  23. Krasi do steal think we going to new high around 3600 region

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    Replies
    1. The pattern is not completed there is more to the upside, but I can not say if we will see 3600.
      At the moment there is many possible combinations.

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    2. CPCE heading back to the lows.. might be time to buy puts loll..

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  24. This is looking very similar to '15/'16 correction. In that correction we rallied back to highs then flagged in a flat formation for months before collapsing again. We will likely make an impulse down to retest 3200 area then have one final rally that shouldn't make a new high before collapsing. This correction could last until early next year.

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    1. Also, I think we will get to atleast 2700 area based on FLD projections. I doubt we will retest March lows. Of course I could be horribly wrong as I didn't expect this to take as long as it has been taking, but this has confused alot of people.

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    2. Yes it really looks similar:) and currently is mid December 2015 with one more pullback lower and final push higher - it fits very good with my analysis.

      2700 is around 62% or lower. If it moves so low I do not think it will stop there.
      High-to-high cycles are usually shorter this one is much longer than the average... maybe because of the elections 2 month sideways move.

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  25. today 20d high?

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    1. We have the minimum time and pattern, but I think it will take another week.

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    2. they are 18 days from 12 october

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    3. It is not over until it is over. I do not see completed pattern and I am watching the previous cycles 10+18 and 16+9 so I will not be surprised to see two more weeks for 9+18.
      We have some sideways pattern which is taking a lot of time.

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  26. Now both cash and futures are in sync - the same pattern. Another corrective structure two zig-zags with the same size. Updated chart from yesterday - https://invst.ly/sq8i0

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    1. Nice R/r seems very good here. Thanks for the update!

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  27. If they go over the line, wr geo 4000

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    1. Nice fantasy:) Have you bothered to look at charts? I guess no.

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  28. They go up 4 in 4 day what they loos in tow weeks

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  29. Replies
    1. Your comments/analysis are the same bullshit over and over.
      100% emotions 0% understanding of charts.
      I will not waste my time anymore answering you.

      Delete
  30. What's a pity, why you so angry? Most of the technician say about this pattern

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  31. It's not emotion, I like your opinion and in the same time I look other investors

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  32. Krasi, do you still think Trump will win? What are you hearing..

    Im reading a lot if fraud being commited by Dems.. will be decided by SCOTUS.. im thinking 55% trump win, 45% biden..

    Curious who military & deep state support.. im thinking Biden..

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    1. didnt know USA elections are like Africanelections...

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    2. It looks like Biden is winning although at the beginning Trump was leading in all the remaining states.
      Magic post:) no matter who wins there will be long legal battles.

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    3. I agree... youll have 70mm very upset voters taking to street when one of the partys is determined the loser..

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  33. Are you thinking another two weeks would take the high to maybe 20/23 Nov .

    Strength of this rally suggests any 2/b will be shallow - 3380/3400 max ?

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    1. I am comparing with the previous cycle so I would say another 8 trading days - https://invst.ly/sqw0n
      Probably shallow, but open for surprises despite the strength is nothing more than another corrective zig-zag.

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