Trading cycle - buy signal, which I would not follow. The same story like last week just the cycle length looks much better close to the expected average length. We have daily cycle high and low and with high probability the same setup as in Jan-Feb this year.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the pattern is a huge mess, the only way I can explain it is either symmetrical(yellow) or we have triangle b followed by diametric(red). The final wave i/g itself is probably diametric - we have a few zig-zags already. Move below MA200/support will confirm that the pattern is completed.
Intermediate term - nothing new, the indicators with long and short term divergences warning for a high. Neowave pattern symmetrical completing at 18m high looks good. Classical EW pattern should be W-X-Y with the catch that there is no impulses. Alternate this is THE top. I do not believe it much, but if we see the last move retraced in less time like 3-4-5 weeks we have reversal.
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.
MARKET BREADTH INDICATORS
Market Breadth Indicators - trend following indicators are joining to the oscillators and turning lower.
McClellan Oscillator - around zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - pointing lower, but still above 70.
Percent of Stocks above MA50 - moving sideways making lower highs, but still above 75.
Fear Indicator VIX - short term divergence.
Advance-Decline Issues - weak around zero.
HURST CYCLES
Short term cycles - most likely we saw spike lower into 10w low and now heading into 20d high. Nothing changed the same setup just shifted one week and the cycles have better average length. Again expecting the same setup as Jan-Feb this year, but this time the cycles are one degree lower.
Week 8 for the 20w cycle. The indices are at 20w cycle high and next is the down phase for the 20w low-to-low cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Next week is possible 9 of a setup. In the previous two occasions it marked the high - the two 20w highs.
hey Krasi- you were spot on with your call beginning of this year. I also noticed the same time that while Apple and other big names were making highs, Amazon was lagging. It wasnt until Amazom got going that we saw the crash there after.
ReplyDeleteWith that being said, Amazon again is lagging compared to Apple & bigger tech names FAANG/MAGA, do you expect Amazon to make a high first before the sell off? In my opinion, if Amazon gets going then itll really suck in the FOMO buyers and maybe people who still have cash on the sideline. Then will be perfect set up to pull the rug.
No, it looks more likely AMZN to move lower first before test of the high or what ever has to come.
DeleteHappy holidays Krasi,which could be the target for oil in the event of medium term decline of the market?
ReplyDeleteI can only guess - like the indices MA200.
DeleteThanks
DeleteNot sure if harmonic patterns are part of your analysis but I've seen some convincing arguments that btc is in a bearish crab pattern. Which means the target is 29000-30000 area. If everything turns together as you mentioned, we are very close if this is correct. Happy new year to you Krasi!
ReplyDeleteI know this patterns, but I do not use them. BTC is at 18m high so yes it is close to a top.
DeleteHi Krasi, What are your thoughts on roaring 20's theses? Once we get a steep decline, do u anticipate S&P move to 6000 in the coming decade?
ReplyDeleteMy thoughts are that "expert's" stupidity is roaring. Why on earth should 2020s be the same like 1920s ?!?!?!
DeleteWe are in a lost decade not roaring decade.
So do you mean after a retest of the March lows there is no case for new high, but a decade of mediocre returns?
DeleteMy definition of lost decade - if someone bought SP500 in Jan.2018 around 2900 10 years later do not expect to see some significant gains, if at all.
DeleteIn the mean time we saw and we will continue to see wild swings. If you trade them you can make money.
There is a case for a new high even after a low below the March low, because the pattern is expanding triangle.
Makes sense, especially when buy the dip and dollar cost averaging has become the daily chat. Something has to give, if everyone buys and holds...
Deletethe 10w high from 12-10 is very short, where are the 5w high?.
ReplyDeleteI think the 10w high was 09-11 and so 09-12 5w high and the next week or the next one 20w high
It does not work this way. You can not paste highs/lows so that the length satisfy what you want to see. When 09-11 is the 10w high where is the 10w low? Why is the 5w high 7 weeks long?
DeleteThis is definitely wrong - high-to-high cycles are shorter and the sequence high-low is not working.
30-10 and 21-12 10w low
ReplyDeleteThe sequence high-low is not working - you can not have 10w low in the middle of the second 5w cycle high.
DeleteI see 02-09 40w high, 24-09 5w low, 12-10 5w high, 30-10 40w low, 09-11 10w high, 20-11 5w low, 17-12 5w high, 21-12 10w low and in one-two weeks 20w high
DeleteIt is the same... it is not right - 40w low in the middle of the second 5w cycle for 10w high.
Delete7 weeks is too short for 10w high, but it is ok for 5w high... Where is the logic?
High-to-high cycle are even shorter so which is more likely?
Are you still expecting that we top this week? Thanks!
ReplyDeleteYes.
DeleteThanks!
DeleteNeely update says down soon but no end for B wave for a few weeks yet unless 3280 broken. So one more buy the dip to go, grandma buys tesla, and then the crash comes shortly afterwards supposedly.
ReplyDeleteB should not be over, but a few week seems too short more like 3 months.
DeleteBloomberg talking head just predicted 4,500 S&P next year. "Blue skies, smilin' at me, nothing but blue skies do I see ..."
ReplyDeleteI doubt they ever saw a correction coming.... only after the fact.
DeleteIt is simple psychology no one want to hear bad news and they want readers/clicks etc.
If I start to talk how great everything is, I will not be surprise to see the readers doubling:)
I agree, Krasi. And buying EVERY dip works great, until it doesn't. Only a matter of time.
DeleteSo for you 24-09 was 10w low?
ReplyDeleteYes, one longer cycle followed by shorter one. This is how cycle behave.
DeleteExactly the same with the highs one shorter is followed by longer one.
Krasi, we see ATH again
ReplyDeleteHi Krasi, looking forward to the end of the year long term update!
ReplyDeleteHappy new year to you and yours Krasi!
ReplyDeleteHappy new year krasi and all the participants
ReplyDeleteFeliz año nuevo
ReplyDelete