Trading cycle - another flip to buy signal this time. We have 4 flips within two months. The reason is we have a sideways pattern running. Now the high-to-high cycle is mature for a top and waiting when it will reverse for the real down part of the fourth daily cycle.
The analysis and trigger should point to the same outcome. When they diverge is wait to see, which one is right - the analysis or the trigger. I bet that the analysis is right(no reversal) and it is playing out. Sideways patterns triangles and flats are the "wekaness" of this trigger.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - so far corrective move. We have two legs up with the same size very well visible on the futures with the big decline in the middle. On the cash index the hint is this perfect channeling which occurs in corrective structures. It is less likely to mutate into impulse more likely expect some kind of a pullback next week. Any pullback above 50% is b wave. 62% pullback or more and we have triangle.
Intermediate term - with another corrective move there is many combinations. I am showing those who will complete the pattern - g/Z triangle(yellow) or g(red).
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 - oscillators are resetting, but I do not see strong reversal to support this move up.
McClellan Oscillator - lower high.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned up.
Percent of Stocks above MA50 - another lower high so far.
Fear Indicator VIX - in a range too, higher low so far.
Advance-Decline Issues - weak around the middle of the range.
HURST CYCLES
Short term cycles - 5w low and now heading into 5w/10w high. I am speculating that we will see similar 5w cycles for the 10w cycle high. This means symmetrical 20d cycle 9+9=18 leading to two identical 5w cycles 10+18 and 9+18 - short said up to another 8 trading days before we see the high.
Comparing them the index is at 9-10 day high(the circles) and now a few days pullback is expected followed by final move up for 3-4 days.
History rhymes it does not repeat and with the waves it is the same they alternate. What I mean in the previous 5w cycle the pullback was 4 days sideways move and this time it could be deeper pullback. For example the previous up leg from 24.09 was - weaker move up, sideways pullback, strong 4 days up with gaps. The current up leg is already alternating - strong 4 days up with gaps, pullback maybe bigger this time to alternate and what left is the weaker final move up.
Week 6 for the 20w cycle. For now sticking to the plan that late September was 20w low and we have not seen the 40w high.
What do you think about the possibility we are forming a similar pattern to April to Oct 2019? Where formed a triangle then rallied until Feb 2020.
ReplyDeleteI will say that there is no such think as two consecutive corrective legs in the same direction which are the same and do not alternate neither in time nor as a pattern.
DeleteThis is discussed above - corrective waves must alternate - time and/or pattern.
Honestly I have to say that your triangle from the October 10th post has actually played out perfectly on SPX and NDX! To me RSI is showing the last week's move is over so I think it's very likely we get the lower high for G and reversal next week.
ReplyDeleteI found a very interesting video by Neely for Bitcoin. He is making a dramatic call that BTC is in a terminal wave and would crash well below $1000.
https://drive.google.com/file/d/1lB3wpdQYHcTFnkWoBxyLfD8Rjo72T174/view
My thinking is that with BTC and SPX correlation close to 80% lately, things are starting to really synchronize for a major down move.
For me too big and steep for e wave of contracting triangle... it could be G and a top.
DeleteBTC looks like c/B with C to follow so yes we should see dramatic decline in sync with the indices.
How can you predict the future of a technology (fin-technology?) like bitcoin based on a chart? You can predict the price but it's interesting to see a prediction on the technology itself based on price action at this moment.
DeleteYou think Bitcoin price is based on the tech? The tech is easy to duplicate (and has been with alt coins, in many cases better). The price is based on emotions like everything else.
DeleteI am not an expert, but I hear the technology blockchain(which is not Bitcoin) has a lot of potential.
DeleteOn the other side Bitcoin(which is not the technology itself just based on it) is not different... from the tulip bulb mania for example. It is worth what you believe and nothing more. So we are talking about faith and money and this creates predictable patterns because it is all about human emotions - money,greed,fear leading to stupidity.
Momentum of BTC looks exhausted so could be end of the terminal pattern from the video- https://imgur.com/a/vLGzh4J
ReplyDeleteI think the narrative could be as simple as realizing BTC isn't safe from Feds (IRS confiscated $1B the other day from Silk Road) and isn't a real hedge against anything like deflation or equity vol. It's just another risk asset that tracks the SPX, but has literally nothing real backing it up. Even Tesla has some small amount of assets and cash flow behind the bubble. The only real asset ever backing BTC was the electricity wasted to mine it!
Those miners make great heaters though!
DeleteYes, many have fantasies that Gold or BTC is a save haven.... if the puppet masters decide that gold/btc is a threat for them they will just confiscate/forbid it.
DeleteIt happened once already with gold during the great depression. Those who think it can not happen again or btc is different are naive fools.
What's wrong with you guys? Every smart a$$ on twitter is telling me that bitcoin is going to infinity and here you are, smashing all my dreams. :-))))))
DeleteKrasi is a bad boy :)
DeleteDAX 1h - https://invst.ly/sreto
ReplyDeleteTesting the broken trend line - https://invst.ly/srety
DJ the same - https://invst.ly/srev1
SPX stronger, but not much different - https://invst.ly/srevt
If the ED plays out I will trade it because it is ending pattern and this could be the top and it is reliable pattern to trade. So watch if we will see an overlap today.
ATH. Hope it fails from here given RSI divergence etc
ReplyDeleteThree zig-zags in a row with the same size - https://tvc-invdn-com.akamaized.net/data/tvc_895a879d66ae7a5b7af7e1428d2602ec.png
ReplyDeleteWith orthodox EW this should be w-x-y-x-y-z more likely another diametric g/G
if it's "Z" would Z be finished?
DeleteYes, but it does not make much sense - part of what is it????
DeleteDiametric makes more sense.
Krasi, from cycle, go doun from tomorrow?
ReplyDeleteI can not say how long it will takes 2-3 or 5 days.
Deleteexcessive optimism now - vaccine , president and $$bns of stimulus .
ReplyDeleteShould turn soon , but could just as easily extend this final leg by 100pts ...
From TA perspective it is better to see divergence first 1h and 4h
DeleteFrom cycle perspective a few more days is better
From pattern perspective g/G makes sense with orthodox EW I do not see pattern
Short said g/G with max target 3800 will fit better, but who knows this could be the top.
wise wise words
DeleteKrasi, what do you think about APT? It dropped alot today on vaccine news. I am expecting to rally when the market crashes similar to Jan/Feb of this year, especially with COVID getting worse.
ReplyDeleteIt looks like long sideways correction before heading higher again.
Deletezig-zag lower completed and now higher.... the whole correction could be a triangle.
Wow, we had to start using orthodox methodology to make the count fit
ReplyDeleteObviously you do not understand what you are talking.
Delete$DXY looks like it rallies from here, at least gold thinks so
ReplyDeleteThe same story push the futures and sell. The primary pattern is diametric and if you look at the daily chart it is the reg g... just there is no pullback, some one is in a hurry to offload to the "smart traders".
ReplyDeleteare you thinking of inflation coming fast and soon? I look at the AG commodities and Oil and everything looks like it's bottoming. Wheat has been making a base for over a year with monthly bull divs. I see it in the supermarkets for sure but the FED keeps saying it isn't here yet. Pow doesn't shop at my store.
ReplyDeleteyour chart is upside down
ReplyDeleterotation out of tech keeping the blue chips up .
ReplyDeletestarted shorting nq here for a starter
I wouldnt be too fast
DeleteNeely today has forced his projection from diametric to "RARE Neowave Symmetrical", a pattern that is composed of 9 legs of similar time (versus Diametric's 7 legs). Still warns major top forming, and so recent price action just postponing the inevitable (topping process for wave b).
ReplyDeleteSo instead of looking for "g", now we will have "h" and "i" to complete b wave.
Deletedid he post new video? Or tweet?
DeleteNot buying it, for this to work you need at least another 5 months.
DeleteAnother 1-2 months will be in the middle of 40w and 18m high does not make sense.
I am not an expert, but I think symmetrical can complete with lower high, which will be ok for the cycles. One thing is for sure the pattern is 100% corrective and it is extremely difficult.
DeleteYes, as he projected the ending of b, his "i" makes a lower higher than the "g" leg.
DeleteI can't see how this symmetrical works with a 2-month long E wave from July-September? Did he change the labels on the other waves from his diametric?
DeleteAlso I am curious if he is still counting everything since 9/24 as wave G, or is it G to 10/12, H down to 10/30 and now we are in I for the last week?
Please link a chart if you can :)
No changes that I could discern, only extended the b leg by two subwaves, h and i. I subscribe to his service, so cannot pass on his work.
DeleteAh I see, that makes more sense to expect a lower I than G. I think the RUT eventually needs to put in a real divergence on the 4h chart, maybe with a higher high. So it makes sense that SPX would rally for another wave up with a lower high at the same time.
DeleteYes, the pattern feels somehow incomplete with one more pullback and leg up even with lower high it will look better.
DeletePump and dump 120-130 points lower from the high.... distribution from finest explained this weekend.
ReplyDeleteThe sheeple dreaming of 4000 around the corner and JPM just came out with 4500 :)))))
Back to earth at the 62% retracement of e, still there is chance for g/G with target now 3750 or double top as long as it stays above the bold line - https://invst.ly/srt9i
that daily candle - whoa!
DeleteYes, the daily candle smells like reversal this counts better - https://invst.ly/srtsy
Deletenice i hope it bounces quick for futures and then drops
Deletewhere can I see neely's symmetrical?
ReplyDeleteby subscribing to his website service
DeleteI think that was the top. Nikkei completed 5 waves up or a triple correction:WXYXZ from March lows.
ReplyDeleteWhy I have this feeling that the pattern is incomplete? - because the market is moving in series of zig-zags, which itself consist of smaller zig-zags and we have missing wave.
ReplyDeleteHere is NDX chart with SP500 below - https://invst.ly/sry12
The pattern is the same and it is confirmed from RSI.
We have series of three big moves - zig-zags.
Inside this zig-zags all the "a" and "c" waves itself are zig-zags - pretty obvious from the price and RSI. It just does not feel right because final wave c/C/Z to complete another zig-zag is missing.
We have extremely difficult pattern(it should be - b wave of a triangle).
From orthodox EW perspective three zig-zags is w-x-y-x-z, but they do not consist of impulses instead of clear corrective legs that is why patterns like diametric/symmetrical are better match.
I hope this brings some clarity. The theory is not so important. The point is when the pattern will look completed and for me this is what should happen... and works perfect with cycles.
13 october 40w high and 30 october 40w low?
ReplyDeleteNo, this are just 5w lows/high
Deletesliding away....in that "one last high" or NOT territory !
ReplyDeleteMaybe best to wait until she breaks 3350 before getting too excited , but nq short was the way to go .
I suspect the NDX is in a triangle and the top will come with lower high - https://invst.ly/ssg-v
Deleteyep, this is not done yet. Wave 3 completed yesterday. Still need wae 5.
ReplyDeleteYes, it seems one more push higher is coming before reversal.
DeleteJust came to say, I arrived at the same conclusion. The market is going to crash big time most likely in a zigzag and it may take out the March lows, although it is too early to say right now.
ReplyDeleteThe drop from these highs will be very important to see if we will get the same magnitude drop as March. If we drop from highs like a knife straight through 3200 support then we will likely experience a repeat of March on a greater scale. If however we bounce again from support then drop, then we will go down in 5 waves and the drop won't be as bad.
I think when it turns lower the first stop will be 3000, but lets see what happens.
DeleteWe need a leg bigger than this 3200-3600 range to signal reversal.
do you see SP500 making highs while nasdaq lags as it is doing this week?
DeleteNeed nasdaq to start trending up in my opinion if sp500 is to make highs..
Even djia popped monday but then quickly sold off.. proves they cant hold it on its own.. need tech to rally too..
At least the high will be tested. I think we should see one more zig-zag up for completed pattern.
DeleteNDX looks like triangle and this final zig-zag will be another lower high for e - https://invst.ly/ssg-v
Krasi can you comment on TLT?
ReplyDeleteI would say a few weeks higher to complete triangle and 40w high then another plunge lower.
Deletewhat is you view on xop?
DeleteThanks,
Kali
Similar higher into 40w high then lower into 40w low. All assets are moving in sync in the last several years and this will continue in the next few years.
DeleteI think 9 november was 20d high, 10 november was 10d low, the next week 20d low and end of month 40w high
ReplyDeleteEarlier the end of next week. The last three 5w cycles high-low-high do not dived good in two rather in three - https://invst.ly/stagx
DeleteThe end of next week is the third one 9 trading days and OPEX... latest Monday the next week.
wouldn't a weekly gravestone Doji look much better on the S&P futures? Alternatively a Doji on SPX cash would be 3583, would make a perfect long legged Doji right in the middle of the week's range. Monday's rejection of the new highs was so powerful, maybe I'm dreaming but I'd love to see this thing crash next week
ReplyDeletenever mind the comment about SPX cash, bloomberg open price is wrong. it opened close to the high based on SPY. Anyways I want to see a very bearish weekly candle on futures:)
ReplyDeleteI would say in two weeks:)
DeleteThe last four days look like flat correction which is completing with impulse for wave c - https://invst.ly/stu16
ReplyDeletehi Krasi. I found your blog due to your post about Tom Demark Sequential indicators. I coded the indicator myself on the TradingView platform and has been using it for a while. My question is: Do you know if the Aggressive Sequential and TD Combo has the same cancellation and recycling rules as the TD Countdown?
ReplyDeleteFor example, the Countdown 13 is required to be higher/lower than the Countdown bar 8. The Countdown is cancelled if it crosses the TDST caused by its Setup phase. The TD Countdown is recycled if the new setup has true range larger than that of the previous setup. An "R" will appear if the setup extends to 18 bars e.t.c.
I wonder if the TD Combo and TD Aggressive Sequential obey the same ruleset. Can you check in the Bloomberg Terminal settings page for the indicator? Thanks a lot!
I do not have Bloomberg Terminal.... I would say the rules are the same TD Combo and Aggressive Sequential are just another way to count completed sequential and the same rules will cancel sequential.
Delete