Trading trigger - buy signal. Most likely daily cycle low this week and daily cycle high in the next days - this will explain why RSI is not looking very supportive for a rally.
Analysis - sell signal expected. Inflection from 18 month high to 18 month low is imminent.
P.S. - for a trade both analysis and trigger should point in the same direction.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - plenty of zig-zags in both directions... according to cycles a few more days are needed, below 62% retracement(4170 red line) it is over.
Some will count it as impulse 1-2-3 - I am sceptical, from the March low zig-zags everywhere.
Intermediate term - I see one big zig-zag up consisting of two zig-zags. You can count it as W-X-Y(red) classic EW, but there is no impulses, more likely series of zig-zags A-B-C(yellow).
Waiting for the market's final strokes to complete the pattern. RSI is sending clear message that the pattern is completing.
Long term - the move from March 2020 is completing. Expect 7-9 weeks lower and we will watch how big the decline will be.
MARKET BREADTH INDICATORS
Market Breadth Indicators - still weak and ready for a top.
McClellan Oscillator - above zero, multiple divergences.
McClellan Summation Index - neutral, weak with divergences.
Weekly Stochastic of the Summation Index - buy signal, but probably topping.
Bullish Percentage - double top, weak with divergence.
Percent of Stocks above MA50 - short term divergences.
Fear Indicator VIX - short term divergences.
Advance-Decline Issues - weak with multiple divergences.
HURST CYCLES
Short term cycles - most likely 10w low occurred 2-3 days earlier and now heading into 5w high. For comparable length another 3-4 days are needed to complete the 20d cycle and probable 18m high.
Another possible model to satisfy the high-low sequence and the new high this week. The problems - the first 5w cycle is 5-6 weeks long when the usual length is 4 weeks, we do not have high followed by a low rather stretched somewhere in time with higher low, other indices like DAX/NDX did not make higher high... I do not know which one is better - this one or from last week.
The more important for both models the lows are the same - the 10w lows seem to occur very regularly.... if it continues the same way the final low should be the first week of July.
Week 27 for the 40 week cycle. If the model above is the right one the 40w cycle high is now 36 weeks long pretty stretched.
https://www.youtube.com/watch?v=JQIfPn8fX24&ab_channel=SentientTraderVideo
ReplyDeletehicksons latest video would contend when the 18 month cycle is due we will see just how shallow it will be.
Vertical bubble moves causing rampant greed can continue only after greed is purged.
DeleteGreed is purged with fast and sharp declines - the sheeple must bleed.
The only alternative is shallow decline taking very long time - the sheeple losing interest before the next leg.
Expecting shallow and short pullback 5%-6% for a few weeks is nothing more than denial and ignorance.
Agreed. However, the greed part may not care about cycles, and the mania part of this melt up is not defined in size or time.
ReplyDeleteRight now, the only thing anyone still negative on the market has going for them is almost every prognosticator I have seen thinks the market goes up from here. That is usually when you want to get short.
ReplyDeleteHi Krasi, I have been following this blog for a while and I thank you for your work. I can imagine it must be hard to post as consistently as you have. For what it's worth, I've found that number and intensity of rude comments here has always been a contrarian indicator and it only means that the turn that you are looking for is right around the corner.
ReplyDeleteI think people see cycle analysis and EW theory but don't know how to turn it into a system of entries, targets and stops, or misunderstand the author's system. I've seen below average EW analysts who constantly breaks the EW rules but because they have a system and they stick to it, they are able to generate profits in the markets. Admittedly I am an amateur trader and I'm almost 100% sure my count is wrong but I have been able to maintain profitability. Although I think the market should be going down, my system tells me to buy so I hold my nose and hit the buy button and for some reason the market keeps going up. I put in my stop and don't touch it and with a 50/50 accuracy, I've been able to be profitable.
Do you mind outlining your systems for entries, targets and stops and if possible a short history of past triggers and why? Thanks again
i went back and read 8 weeks of comments and the rudest comments were made by krasi.
Deletegood point, only you know that. still, as a moderator of your own blog, you have to have a teflon perspective and keep on. that is best, rather than lowering yourself to petty verbal battles. i try to post only facts as i see them, without insults. there is no place for that.
DeleteConsistent Trader - I will try to summarize it in a post to be more clear, because it is not just MA10 cross and obviously there is big misunderstanding.
DeleteKrasi, I would also appreciate your posting a detailed description of your trading/entry/exit strategies as a whole, versus bits and pieces addressed in this Comments section. Thanks for whatever you can provide those of us interested in this.
DeleteThanks Krasi!
DeleteCrude beginning to rise again. With fiscal policy about to pump billions into infrastructure project, this must rise no? And if it rises, has there not been a strong correlation with stocks over the past few years? I.e they go up together?
ReplyDeletesome rare weakness in sunday nite charts. still looking at 4 hr and daily stochastic for a top before shorting.
ReplyDeleteKrasi keep doing what you do... been a big a fan since i doscovered your site... has been good to my investing..
ReplyDeleteKrasi, what about your short?
ReplyDeleteIt is fine time to add more...
DeleteBest case for me is that this is a b wave high and we have c down before new highs ahead . Can't see an ending pattern that makes sense yet .
ReplyDeleteUntil then , bears have to contend with yet more down/up ay best .
One ray of hope for bears would be a close below 13300 in NQ - that at least might suggest tech has topped and that a wave 2 there might coincide with the broader market high .
more time to eat up come what may . That June top looking more & more likely
Neely out with a dramatic new count. Back of the envelope calculation suggests a top at around 4700+.
ReplyDeleteGreat news now literally everybody thinks there is more to the upside, which means this is wrong.
DeleteI know three other bears expecting a low below the March low and now all three of them expect pullback and more to the upside.
The bears joined the bulls up forever, which means the top is around the corner.
Cycles rule and they will kick the EW guys ass.
When you say the top is around the corner do you mean 4260, 4400, 4650? Around the corner doesn't mean much.
DeleteThis means a few days and even this was too much...
DeletePS, a nice chart to look at is spy divided by qqq - look at the massive falling wedge there with monthly and weekly bull divergences.
ReplyDeleteSo when this goes to 4K then to new ATH will you say your cycles are wrong?
ReplyDeleteOr I guess I should say if it goes to 4K. Might not make it that far.
ReplyDeleteI guess you should say if it goes to new ATH.
Deletekrasi, i admire your patience dealing with these morons!! i think the high is in for at least the next 3 months. we should have an important low sometime in late june/mid july. thank you for your work.
ReplyDeleteAssuming this is the c wave unless & until the decline exceeds 3 days and around 170 pts .
ReplyDeleteEvery decline for the last six months has been 2/3 trading days max and at most 170ish points . Seen them all go , seen the bears shout victory on many of those , so no early celebrations .
Happy to close shorts this morning for the c wave option , in the knowledge that you miss out on max 50-60 points if it waterfalls .
Personally , I expect it to rally from whatever low it finds today
Short term what hat I see at the moment - https://invst.ly/urn7p
ReplyDeleteDo not expect impulses for reversal the decline will be corrective too.
We're agreed Krasi ...!
ReplyDeleteThink tech will lead this up now - I hope choppy up for a week or so .
cash session bounced to heavy resistance. QQQ will probably reach the 200 ma and spy the 50.
ReplyDeleteIt feels like the 10w low and now several days higher for 5w high, like this - https://1.bp.blogspot.com/-_gqJKJedRHk/YIzYigClGgI/AAAAAAAAKuQ/zTixElnJxiEa1uFWX1QZGoGlkwkfdUzsACNcBGAsYHQ/s1820/w492-5.PNG
ReplyDeleteInteresting charts:
DeleteThe zig-zag yesterday is part of bigger one - https://invst.ly/usc5v
The daily chart trend lines(price and RSI) look interesting, expect bounce - https://invst.ly/usc7n
It seems more likely that this is the 10w low
that's 3 TD and 160ish pts , so any further down and the characteristic will have changed from what we've seen over the last 6 months .
ReplyDeleteBounce higher is coming - see the charts above. The majority is betting on higher high. I think it will be lower high, but it should not exceed 62% or 4180 so a stop at break even for my short.
DeleteSounds good, the nature of the move shows polarity has changed likely. Selling the bounce is the strategy.
DeleteThree days down wiping out 4-5 weeks up it smells like reversal. I do not see how to twist this as wave 4.
DeleteDefinitely the behavior has changed...
Elon musk negative comments on BTC all of a sudden. Has that thing topped? Looks terrible at the moment
ReplyDeleteCrypto bubble is not burst. A wave down 14th Apr to 25th Apr then B wave up, now in C wave. If C wave splits into impulse then BTC will go below 10K which will trigger massive margin call and de-leverage which can likely spill over in stocks.
Deleteis now* burst.
Deletethe vix chart gave final confirmation to krasi's top. nice compression, trend line from 2020 high all the way down to the break out.
ReplyDeleteVIX looks bad with the spike 2020 and big wedge/pennant for more than a year.
DeleteWhen it breaks higher it will be ugly probably making higher high above 85.
These drops in the past have all been beaten back up before, hopefully this time is different!
ReplyDeleteIt is different the only comparable decline(speed and size) is early September after the 40 week high.
DeleteSo if this is the 40 week high it is 18 month high too and we have reversal.
Still think a lower high will be the higher likelihood?
DeleteYes, I just do not know how to fit into the analysis another higher high....
DeleteSome will say this is impulse... I would say rather a-b-c, it does not matter the outcome will be the same - https://invst.ly/uslk5
ReplyDeleteGood work, thanks Krasi. 4020 would be a gap fill as well. I also have 4032 as interim support level based on some mathematical calculations (market is now trading utilizing 63 and 64 squares: 63sqr+63=4032; 64sqr-64=4032), so expect a bounce from 4020/32 level. Important is change in polarity - bounces are short selling territory now. The more certain and safe way to enter short is close to wave 2/B top. Next target on the downside is 3969 (63sqr). 14th of May is also local CIT date, let's see if market bounces into 14th +-
ReplyDeleteBounce it! I see neckline resistance on es near 4130
ReplyDeleteyes, looks like that
Delete4134, 4147
Delete4175 also possible. Looking to build shorts gradually
DeleteGood Job Krasi......your call on correction was good :)
ReplyDeleteThere's the C up
ReplyDeleteTHe first major bounce will be at 200 MA. After that is the deciding point. We will either continue up for a wave 3 up or crash in a wave 3 down.
ReplyDeleteAlot of cycle experts are expecting a mid-June low. So I am expecting a major low then, which means we will won't crash past the 200 MA, and this will be a shallow correction.
There is no third waves neither up nor down.
DeleteA lot experts will be wrong. Mega greed is not purged with a shallow correction.
Mega greed? Go back in history if you want to seen mega greed. THe late 1920s is an example of mega greed. We haven't reached that stage yet. This can go alot higher with much more greed. "the markets can remain irrational longer than you can remain solvent"
DeleteThis looks like another false dawn for the bears!
ReplyDeleteI dunno, looks similar to October 2018, everyone is convinced higher high is coming and to BTFD
Deletehttps://schrts.co/AtMXXRAr
Zig-zag higher with a=c and 62% retracement testing MA10 - another 1/3 short.
ReplyDeleteThank you. Where would you do your last 1/3 short?
DeleteWhen reversal is confirmed.
Deleteexpecting to complete A up today , B wave into early next week then a C up into expiry in a weeks time . Chop chop chop...
ReplyDeleteThis weeks 3 day decline was within the "norm" of what we've seen over the last six months , so until we break this weeks low and then 3980 , nothing is certain .
Good luck Krasi - I'm sure you'll get an exit next week if you want it .
No need for exit, looking for entry points.
DeleteI told you guys 4K was a buy opportunity. Now it really gets interesting.
ReplyDeletePretty obvious bounce from MA50 after zig-zag.
DeleteThen why didn't you show it in your charts from the weekend since it was so obvious?
DeleteWell I did say it two weeks ago. Very possible in a week a new ATH which I know you said doesn't fit your analysis. Good luck. Take profits along the way people.
DeleteYup all the way up and to another ATH. See you at 4700+
ReplyDeleteNice fantasy... do not come back crying you have been warned.
DeleteNo hard feelings, Krasi. I wish your own fantasies the best as well
Deletelooks like a b wave up to 4203. then down to 4100, imo
ReplyDeleteKrasi, why did you stop saying the bull market ended in 2018?
ReplyDeleteWriting about what is coming, the past is not important now.
DeleteLooks like we ended at resistance points on qqq and spy. Futures should decide it Sunday
ReplyDelete