Trading trigger - sell signal. Another cross below MA10 after multiple RSI divergences.
Analysis - sell the rips, long topping process.
P.S. - for a trade both analysis and trigger should point in the same direction.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - to early to say what it is, we have to wait for more price action.
Intermediate term - from the March low we have one big zig-zag consisting of two zig-zags, which itself consist of zig-zags. You can call it W-X-Y, but there is no impulses. Waiting for more price action to confirm intermediate term top. After another zig-zag and overlapping, high probability for 20w high and the way market breadth looks like, sudden turn higher next week does not look very likely.
Long term - topping process running for months and maturing. Some kind of b-wave and c-wave will follow.
MARKET BREADTH INDICATORS
Market Breadth Indicators - turning lower. I think market breadth points to a move lower.
McClellan Oscillator - below zero.
McClellan Summation Index - turning lower.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - turned lower.
Fear Indicator VIX - spike up, important is if we will see continuation next week and breaking the trend line.
Advance-Decline Issues - in the middle of the range.
HURST CYCLES
Short term cycles - it looks like we are in the middle of the second 20d cycle and heading into 5w low next week.
Probable 20w cycle high and with two closes below MA10 this should be a turn lower into 10w low. DAX made lower high as the DJ, it shows clear count I do not see a reason to doubt it so as a reference - DAX
Week 7 for the 20w cycle?
The long term count is not very clear, there is no visible significant low, the indices do not show consistent picture so we will be sure only in hindsight where the 18m low is. Two options:
- bullish 40w/18m cycle low in September/early October with one extra 10w cycle for the missing one from 2020.
- bearish the 18m low was in July which means to expect decline into 20w low until November. NDX,NYSE,DAX,RUT,DJT have lows in July so this is the low to pick for possible 18m low.... only DJ have the low in June.
On the DJI weekly chart, the giant wedge that dates back to March 2020 broke down in June and made a higher high 4 weeks ago with a divergence. I think we likely go down to test the weekly 50 SMA with a chance we head down toward filling the large gap at 28,323.
ReplyDeleteSeptember should be choppy - we should see one more week lower and two weeks retracement higher.
DeleteIf a bigger decline is in play next week should be strong down followed by weak retracement.
Krasi, still sticking to short term forecast - this week down and then 2 weeks up?
ReplyDeleteNeely seems to be saying that if there is no meltdown soon, its bullish.
This week should be 5w low and usually we should see 1,5-2 weeks higher for 5w high.
DeleteThere is bearish scenario the indices are close to 20d high day 9 already and after consolidation at 50MA they can just continue lower. In this case the highs are just series of lower highs.
No continuation higher today so this bearish scenario is real - looks more like sideways consolidation so far. We will know for sure next week.
He is saying it because he has a rule - reversal should retrace the previous move in less time. It is a good rule this is how it works most of the time, but it is not a must.
DeleteI have seen other type of reversal - when it takes too long for the price to turn in the direction of the trend it just accelerates in the opposite direction.
Recent example is TLT - I was sure it is at 18m low and despite the very slow start we saw subsequent acceleration higher into 18m high.
Thank you for the response. Makes sense.
DeleteEvergrande becoming ever problematic
ReplyDelete