Trading cycle - buy signal. The price is finding support at MA10 which is typical for 20d/5w lows, but the problem is there is no strength rally up and test of the MA... just crawling along it. I think we saw half cycle low and one more move up to complete daily cycle high roughly 45 days(red count), which is the usual length.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it is not clear where the b wave was completed. Most of the indices like NDX/RUT/DJT/XLF/SOX/EEM(in fact all without DJ and SP500) look like b wave low on 12th of November(the first b) and c already reached the expected 0,618 extension or more. SP500 looks probably better with triangle(the second b), but why should it have different pattern?. Just waiting to see completed pattern, short term cycless pointing to at least another week anyway.
Intermediate term - nothing new. The indicators with divergences warning for a high. The pattern which fits best is symmetrical completing at 18m high.
Alternate the pattern completes at the current high g/Z. The difference will be the speed of the decline, which will follow.
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. The indices are close to price high and turn lower. The indicators are pointing to topping not continuation.
MARKET BREADTH INDICATORS
Market Breadth Indicators - the same like last week just the short term divergences are better visible after this week.
McClellan Oscillator - short term divergence after slightly overbought levels.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - short term divergence after overbought level.
Percent of Stocks above MA50 - short term divergence after overbought level.
Fear Indicator VIX - closed half of the gap and testing the low.
Advance-Decline Issues - short term divergence after overbought level.
HURST CYCLES
Short term cycles - the more likely scenario is that we saw 5w low on Monday as expected and now heading higher into 5w/10w high. The alternate scenario still have not seen the 5w low will mean a few very long 20d cycles in both directions not impossible, but I want to see confirmation first like 3-4 days lower.
If you dig deeper probably Friday was 10d high and next week Monday-Tuesday lower for 10d low and a few days higher for the final high.
Week 5 for the 20w cycle. High-to-high count week 14 so nearing 20w high.
"There is no impulse the wave is corrective(7 waves) and the "experts" again with their dollar collapse right on time to be wrong again."
ReplyDeleteJust curious. If the experts are always wrong then why did none of you guys predict this epic run? I looked back at all your charts since Feb. Same in 2019. You consistently miss out on making money which is the whole point of the game. Both up and down.
The same old bullshit, which I am listening at every top for the third time since 2018...
Delete"I do not like your analysis - You consistently miss out on making money"
The market does not care if you like it or not and this great gains will evaporate for the third time... and you will just watch.
Oooo wait you are so smart you will see the reversal and exit. Like all "the experts" on this blog last year..... and then March happened:))))
How did the "experts" help you trade the decline(for example taking profits), when they never saw it coming and talking bullshit until the last moment about third wave?
But hey I could be wrong sell the USD and wait SPX 4000 and we will see how this will play out.
Of course it will eventually go down. We all get that. If you flip a coin and call tails every time at some point it's gonna hit. No one following EW and stuff like that makes money. That's why all the gurus have subscriptions. They can't make a living off their own theory. Not knocking Krasi. I think everyone is in the stock market to make money, not look at lines on a chart after the fact.
ReplyDeleteYes and No.
DeleteNo - you are wrong you can make money with EW and it works for those who know how to use it. There is no other tool who can help you predict 30% lower when the market is flying and it has proven itself this year.
Yes - majority can not use it and constantly wrong, but this is not a problem with the EW theory itself. Second it is not the perfect tool for executing trades. I have switched to something else and Neely has two separate services - one for EW analysis and one for trading.
It has nothing to do with coin flipping. It has to do with theory which tells you what kind of pattern you have and based on that what to expect next. You can not flip a coin and predict 30% decline and now even bigger one.
We are in a “melt up” here because the market is betting on a vaccine and stimulus. Bad news is moving the market in a positive way because it is being viewed as that extra push for the government to pass more stimulus. It’s what’s happening in the here and now and irrational if you look at the situation objectively. But the payers here have shown that they are not always rational. And Unfortunately the market can remain irrational longer than you can remain solvent. Look as I’ve said before I have enjoyed the commentary krasi provides. And it has been informative for me and helpful at times. I also have subscriptions to Lowrys which is the oldest technical analysis company around. And sentimentrader more recently. Now what these services do is look at different forms of proprietary market breadth and they have both been calling for a run up. I partially profited from this run up but then right before the highs I switched to a contrarian trade. Because of all the extremes and irrational exuberance. But as I’ve come to find out these are not always contrarian indications of a flip in price direction. Eventually the market will pull back because that’s the nature of the beast. But for now it looks as if it’s headed to the moon.
ReplyDeleteThe sentiment is in a melt up and the market is headed for a high.
DeleteThe comments are the perfect indicator.
- I am so wrong I missed it again
- EW does not work
- the market is headed to the moon(in fact gone nowhere for three months)
From the S&P 500 10/30/2020 low @ the 200 EMA price has definitely gone somewhere and that somewhere is up to deny that or minimize it is silly.Since Nov 5th price hasn't even been past the 20 EMA. Demand is definitely there on the buy side and its strong. All Im saying is that the market in moving irrationally right now as it is overstretched to the upside. With all the negative news developments it continues to climb. Now I know guys will say "news doesn't move price" but thats BS. Technicals are always there but the news is the fuel for these larger moves at least in the beginning. The market is betting on stimulus before the new year. And when it doesn't get it price will turn because the technicals are ripe for it and the jolt from the negative news will push price lower. Remember as I said in my last post I am short the S&P now so I am not totally disagreeing with you.
DeletePrice is pushed up against multi month upper trend-line resistance http://schrts.co/uMDJvsHD its also interesting that RSI isn't higher at this point in the move.
DeleteWhy are you short if this is going to the moon as you say? Seems like your just looking for any validation from Krasi to justify being short.
ReplyDeleteDont worry Krasi.
ReplyDelete:)
I am not worried, neither I have any doubts what will happen:)
Deleteyes, when 2019.
ReplyDelete:) :)
Hi Krasi, what criteria would you use this time to enter a short. MA10 isn't helping because of sideways move. This time, would you enter after the pattern is complete or wait for some confirmation below a certain level?
ReplyDeleteThe rules will never change 1/3 or 1/2 position at possible important low/high(according cycles and EW) and add to position/or open position after MA10 cross.
DeleteAbout the MA10 cross - it is doing exactly what is should be doing.
First it is a trade trigger and it tracked the three short moves very well. It is not an analysis tool this job is for EW and cycles and they said it is not the big down, which was right.
Second it should be showing the 10w cycle and exactly this happened. The caveat is we had two very short 10w cycles up and down consisting only of three 20d cycles instead of four creating this sideways move.
In fact I have focused too much on the weekly chart looking for the two 20w cycles lows instead of looking at the daily cycle chart which was spot on again... I have should seen the 40w low earlier.
Thank you Krasi.
DeleteThanks for your analysis. I think that this wave is corrective, I don't think there is another possibility. The incredulity of the majority is typical of the moment we live in. Time will tell who is right. Good luck.
ReplyDeleteNeely latest count similar to Krasi, but looks like it may take longer in time to complete. Maybe Neely is lurking here 😊
ReplyDeleteIt is the opposite:) I borrowed his neowave patterns and ideas because I run out of classical EW patterns, which can explain the price action.
DeleteI agree we are going to head down maybe 25-35% but it is too early to guess we will head down to March lows. That is too premature. Even Nelly which you base your outlook on says he doesn't know for sure how low this leg down will be.
ReplyDeleteIt will be a nice buying opportunity once it's finished.
I think he is right about the expanding triangle. Because of everything what is happening around us I do not think it will be nice sideways contracting triangle.
DeleteIt is a time of high emotions and big changes, which will be reflected in the patterns.
But yes once finished it will be another buying opportunity.
It is interesting how this analysis and Neely's analysis conflicts with some historical data like this one - https://twitter.com/bullmarketsco/status/1335919284485316608
ReplyDeleteAny comments Krasi? Is the difference here the corrective structure from the last few years?
Useless statistic showing nothing and misleading interpretation.
Delete"Over the past 30 years, this is how multi-year bull markets started" - you have to be blind not to see that twice we have the start of a long run and twice it appears 1-2 years before the top. So 50-50 like coin flipping the start or near the end of something..... or statistically one big nothing.
Now you are seeing this 1-2 years before the important top and the big plunge.
I have EW to tell me if it is the start or the end and cycles for the time so I would not waste my time with such useless statistics.
Are you saying that it will take 1-2 years for the market to top? "Now you are seeing this 1-2 years before the important top and the big plunge." So the correction should happen in late 2021 or 2022?
ReplyDeleteIt is a triangle the top will be visited one more time in 2022 and the biggest decline will follow after that.
DeleteVery interesting krasi
ReplyDeletewhere do you see the spx going in the short term Krasi?
ReplyDeleteIt is shown above on the charts grinding higher for another week.
DeleteKrasi make it stop
ReplyDeleteOk, but only for a day or two after that I will tell the market to continue and complete the pattern and cycle:))))
DeleteI bought the dip here, so you know the top is in.
DeleteCan we still see 5w low this week or the next one?
ReplyDeleteIt has to be this week today and tomorrow(it is too long already) with sharp decline into the 3600-3650 area. Theoretically it is still possible, but if it is gone happen - I can not say.
DeleteI do not remember giving targets for this move, despite that I am sorry my analysis caused you emotional pain. Good luck.
ReplyDeleteHi Krasi, I haven't studied EW much yet but curious to know why it's hard to analyze corrective waves and the current wave structure. Except for you and Neely, most people see SPX breaking out of the diverging structure, dollar going down into a bear trend, other segments like financials catching up and entering a bull trend, fed's excessive money printing boosting markets until 2022-23, etc. Just curious to get your perspective on why most people (mostly on twitter) are so bullish about everything and don't foresee a drop of this magnitude.
ReplyDeleteImpulse is impulse one outcome. Corrections can be several different patterns plus combination of them so many different outcomes, which often as I say mutate - it looks like something than changes to something else.
DeleteThere is many, which see it as a corrective wave, it is not only me.
The majority do not see it because they do not know how to analyze the markets. They do not know what they are seeing - it is strong so up for ever this is the analyzes. Then comes the excuse FED what ever blah blah.
For the EW majority counting waves is counting to 5 - it is strong so it is impulse this is the analyzes. Why bother with complex theory everything is impulse..... you have to be blind to see an impulse. The worst is so many "EW experts" selling subscriptions and can not make a difference between impulse and correction.
Thank you, makes sense.
DeleteOne guess zig-zag with c as a diametric - https://invst.ly/t36tk
ReplyDeleteThe other option which is working and the only orthodox EW pattern I see is b triangle and c is expanding ED with w4 just completed.
Just theory, in both cases the outcome is the same one more up and intermediate decline.
I appreciate the mid-week updated charts. A lot can happen early in a week to make the weekend charts semi-irrelevant. Thanks.
DeleteKrasi. you go short for close down ema10 daily???
ReplyDeleteNo, it is too early. The analysis points to one more high and at the moment there is nothing convincing to say reversal. Most likely just playing around MA10 for 20d/5w lows.
DeleteKrasi. Crees que en Europa se caerá menos que en Usa? Los patrones parecen confirmar más fuerza en Europa
ReplyDeleteEurope is not different - the same patterns. In fact Europe is weaker not stronger.
DeleteThis looks like very probable scenario for the European indices - https://invst.ly/t3pst
DeleteWait. What??? You are now forecasting markets UP by mid-2021? Just a week ago it was supposed to be down 30%. What changed?
DeleteThis is not something new, look closely the charts above - down hard after 18m high March/April.
DeleteWeek ago it was not any different. It could be lower high of a symmetrical or triangle, but still the pattern will not be completed until the 18m high, then comes the decline.
I say it is another corrective leg and it will be retraced, which does not mean I am calling the top every week. It will top when the time has come.
When is the next 18month high do you mean? Aug-Sep 2021?
DeleteNo, March/April 2021
DeleteOK, so from my understanding of the above charts, it is going to make a new high in late Dec, then make a lower low which bottomed around Feb, then make a high(could be lower high) around Mar/Apr, then the huge dump. Did I understand your view right?
DeleteSomething like that. The middle section between the current high and the final high is not clear at the moment - more corrective waves from bigger corrective pattern.
DeleteIn the case of a symmetrical lower low and lower high.
In the case of a triangle higher low and lower high.
In the case of a flat roughly the same low and high.
Looking forward to the update from Santa Krasi
ReplyDeleteThere is no drama:)
Delete