Trading trigger - sell signal.
Analysis - the indices turned lower to complete the 4y cycle. Intermediate term - close to a low(in a week) and the next high around the end of September.
P.S. - for a trade both analysis and trigger should point in the same direction.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - looking at different indices the most likely pattern is double zig-zag. w-wave with c diagonal, x-wave running flat and now expecting b-c to complete y-wave zig-zag. The surprise will be if we have 1-2-3 impulse... not a big believer, but who knows.
Intermediate term - some kind of w-x-y/B or a-b-c/B - at the end only the labels are different. Now turned lower and most likely the C-wave is running.
Long term - most likely huge double zig-zag from the 2009 low. If we are lucky this is lower degree b-wave(green) and there is one more high. If not multi year decline has started.
MARKET BREADTH INDICATORS
Market Breadth Indicators - one oscillator is oversold, but the others are just pointing lower with no signs of a low.
McClellan Oscillator - hit very oversold level, expecting divergence next week.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - moving lower.
Percent of Stocks above MA50 - moving lower.
Fear Indicator VIX - moving higher.
Advance-Decline Issues - moving lower.
HURST CYCLES
Short term cycles - heading lower into 10w low. When the current 20d cycle is completed this should be the 10w low.
Week 22 for the 20w cycle. I think the most likely scenario is 18m cycle consisting of three longer 20w cycles. On the chart above I will try to stick to the theory and count four 20w cycles with no clear 40w low.
The highs do not have average length too. I think we have 4y cycle high consisting of 2 cycles instead of 3x18m cycles like the previous one 2018-2022 with a high in the middle.
it's amazing how all the trolls, who probably never traded a day in their life but strive on arrogance disappear every single time the market heads south! it's hilarious really. i think they will do a harakiri in a few years as the big bear unfolds and they will not be missed. great job krasi, thank you for all.
ReplyDeleteJP
bears are just as annoying. They have been talking about a drop since October 22. How did that work out? How much money did they lose? Now we get a little pull back and suddenly bears are genius? I wish I would have bought the oct low and not listened to this nonsense.
DeleteObviously you did not read my comments in October when I explained several times that this is important low - simple 18 month low plus market breadth. Of course many bears did not believe it.
DeleteNow the bulls do not believe it - when it is nonsense buy the dip and hodl.
No I went short when u went short in December.
DeleteAnd did you know that this is just 20w high and this trade is good until the next 20w low?
DeleteAnd this move higher will continue until it reaches 18m high... back than sticking to the theory roughly in March?
Well done JP, hope you went short on this 100 point correction.
DeleteKudos, Krasi! Have a nice weekend!
ReplyDeleteYou usually says all/most cycles align. Why is TLT cycle not aligned? Why isn't TLT headed for a much deeper low?
ReplyDeleteSee Krasi's comments to my query on TLT last week. Might answer your question(s).
DeleteIndices will make 4y low and bonds 4y high so they are aligned.
DeleteThanks. With bonds, higher/lower is always confusing. TLT has been going down but you said last week "TLT is clearly higher it has to complete 4y high" which confused me. But I guess when you say TLT/bonds higher, you mean yields are higher (and bonds lower)
DeleteI was thinking bonds were closer to a bottom. The ratio charts of tlt/spy are at monthly extremes.
Delete"Anonymous", Krasi's comment says "Indices (equities/stocks) WILL MAKE a 4-year low ...", and therefore bonds (not yields) WILL MAKE a 4-year high, coincidentally/aligned. At least that's my understanding of his thoughts from last week and this one, since stocks are currently AT HIGHS, and bonds AT LOWS.
DeleteKrasi, please wade in here if I have misinterpreted / misrepresented any of your comments/content on TLT.
Deletekarsi what is the estimated low this round?
ReplyDeleteI guess around MA100....
DeleteI am a rookie. may I know what is your ma100?
DeleteMoving average 100
DeleteKrasi, can you please post a chart of TLT. showing your prediction for next 6-12 months?
ReplyDeletehttps://ibb.co/YkbPYwZ
DeleteSo you are predicting interest rates to be higher for several years (since the high you are showing is a 4 year high)
ReplyDeleteYes, this is TLT(bonds) in a few months we will see 4y high and continuation lower, yields will do the opposite.
DeleteTherefore, per your TLT chart, Krasi, four-year high to test/retest broken monthly uptrend line, then get slapped back down another leg, or two, or three ,,,, yields to the moon.
Delete5w low today?
ReplyDeleteNo 5w high yesterday.
Delete