Trading trigger - sell signal, it is a better idea to wait for the next high if you want to sell.
Analysis - sell the rips, time to get out, potential major top.
P.S. - for a trade both analysis and trigger should point in the same direction.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - possible double zig-zag lower. Waiting for more price action - it could be b/Z or a of something bigger.
Intermediate term - I see three zig-zags with roughly the same length in time W-x-Y-x-Z or possible W-x-Y with complex double zig-zag for Y. I am expect one more high before significant decline - it could be higher high with divergence or lower high.
Long term - topping process running for months and maturing. Some kind of corrective wave b-wave and c-wave will follow. MACD and RSI look very "bullish" - multiple divergences.
MARKET BREADTH INDICATORS
Market Breadth Indicators - tricky it could be 10w low and turn from oversold levels or the markets are in bearish mode and the oversold levels will be tested one more time for 10w low in 1-2 weeks.
McClellan Oscillator - bounce from oversold level.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - bounce up.
Fear Indicator VIX - higher high, waiting for higher low.
Advance-Decline Issues - lower low and bounce from oversold level.
HURST CYCLES
Short term cycles - the cycle model on the chart below has good looking high-low sequence. In this case we should see 5w high soon and final decline for 10w low. Alternate this week we saw the 10w low.
Week 9 for the 20w cycle. Long term I am expecting 4 year cycle high. The 18m low more likely in late September with one extra 20w cycle, alternate on time in June.
I think a surprise rally to around 4640 is certainly possible this week. Rsi is quite low already and sentiment had significantly shifted bearish. Also done of the high growth tech stocks twtr, pypl, zm, etc have sold off significantly and are at support. Greater chances of a short covering bounce than a flush I think.
ReplyDeletethere's the strong bounce. Krasi, Any possibility this is just a B leg with a larger C to follow into the christmas holiday like 2018?
DeleteSo far we have the same playbook as the Feb 20 first covid scare . 3-4% sell-off followed by new highs .
ReplyDeleteThe 4500 area identified last week was pivotal and looking likely that we get a double top or new highs in the next few days .Reducing longs there .
Then we see what retrace we get early next week before we reach the mid month CIT .
cycles say higher into mid Jan , but I have a feeling that won't be the case this time .
Yes, too steep to last a few weeks with this pace... sometimes the market is very creative in doing nothing so it can just hang around the highs for the holidays.
Deleteplaybook from last year says to cut longs today and await a 1-2 day pullback at min . Fed next week too.
ReplyDeleteMight be different , but with 200 pts in them the risk too big now .
A dip into the Fed might be interesting , but only if it's a big one to revisit 4600 or below
Looks like a B wave today to suck in shorts, another C wave into holidays. All those jnk stocks like AMC getting everyone excited again :)
ReplyDeleteWith so much underlying selling going on, it feels like the indices are like a dead man walking. :-)
ReplyDeleteYour end of the month target already hit. What's next?
ReplyDelete