Mar 31, 2015
Update
Given the strength yesterday the preferred scenario higher high looks now more probable.... I would wait for a pullback today and/or tomorrow for short term long trades. Support area around 2065-2070.
Mar 28, 2015
Weekly review
Short term view - something to the upside...
Intermediate term view - a new high before the correction starts
The overlapping moves were something corrective and the indexes took the path lower as expected. Great, but I do not like the move lower.... I think the indexes will try to make another higher high.
The charts, weekly and monthly, look bearish.... but when I see possible a-b-c around day 40(40 day cycle low), the DAX made a-b-c for minor wave 4 and we have five wave impulse of the lows probably i of 5, market breadth not really supportive... my feeling tells me the move lower is just part of a bigger pattern probably 4 of the ED.
If the correction is running we should be in the stage where the indexes should not move higher for a long time and we should see only shallow pullbacks higher. So the price should stay below resistance and 61,8% Fibo around 2085.
We will see a correction eventually, but I am afraid we saw another week which does not give us clear picture and we must keep an eye on both scenarios. If my feelings is right:) probably two weeks to the upside before the correction starts.
Trading is much more simple - if you are short as I have suggested, you can put a stop at break even and just watch the game:) If the indexes move lower great and if they do not... short term traders find a low for a long trade the others wait for a new high.
TECHNICAL PICTURE
Short term - as long as the price stays below 2085 there is a chance that the correction has started. We will watch closely what the price is doing... so far the move looks corrective and probably will test the lows.
Intermediate term - I am afraid we still have to watch both scenarios.... do not forget PATIENCE is very very important if you want to be a successful trader.
Long term - no change for the long term.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - does not really show strength for the move lower.... this could change, but at the moment I do not see nothing which should make me bearish.
McClellan Oscillator - higher low... divergence even if SP500 make a new low.
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal but reached oversold level where a swing usually bottoms.
Bullish Percentage - sell signal but above 70...
Percent of Stocks above MA50 - in the middle of the range around 50.
Fear Indicator VIX - nothing interesting for the short term... long term series of higher lows.
Advance-Decline Issues - nothing interesting, up and down around the zero line.
HURST CYCLES
We are around 40 day cycle low... waiting to see if one more low is in the cards to place it at the low.
Week 8... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Nothing really interesting on the daily and weekly chart..... at 4 of a setup.
Intermediate term view - a new high before the correction starts
The overlapping moves were something corrective and the indexes took the path lower as expected. Great, but I do not like the move lower.... I think the indexes will try to make another higher high.
The charts, weekly and monthly, look bearish.... but when I see possible a-b-c around day 40(40 day cycle low), the DAX made a-b-c for minor wave 4 and we have five wave impulse of the lows probably i of 5, market breadth not really supportive... my feeling tells me the move lower is just part of a bigger pattern probably 4 of the ED.
If the correction is running we should be in the stage where the indexes should not move higher for a long time and we should see only shallow pullbacks higher. So the price should stay below resistance and 61,8% Fibo around 2085.
We will see a correction eventually, but I am afraid we saw another week which does not give us clear picture and we must keep an eye on both scenarios. If my feelings is right:) probably two weeks to the upside before the correction starts.
Trading is much more simple - if you are short as I have suggested, you can put a stop at break even and just watch the game:) If the indexes move lower great and if they do not... short term traders find a low for a long trade the others wait for a new high.
TECHNICAL PICTURE
Short term - as long as the price stays below 2085 there is a chance that the correction has started. We will watch closely what the price is doing... so far the move looks corrective and probably will test the lows.
Intermediate term - I am afraid we still have to watch both scenarios.... do not forget PATIENCE is very very important if you want to be a successful trader.
Long term - no change for the long term.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - does not really show strength for the move lower.... this could change, but at the moment I do not see nothing which should make me bearish.
McClellan Oscillator - higher low... divergence even if SP500 make a new low.
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal but reached oversold level where a swing usually bottoms.
Bullish Percentage - sell signal but above 70...
Percent of Stocks above MA50 - in the middle of the range around 50.
Fear Indicator VIX - nothing interesting for the short term... long term series of higher lows.
Advance-Decline Issues - nothing interesting, up and down around the zero line.
HURST CYCLES
We are around 40 day cycle low... waiting to see if one more low is in the cards to place it at the low.
Week 8... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Nothing really interesting on the daily and weekly chart..... at 4 of a setup.
Mar 21, 2015
Very long term
I was playing with the monthly charts and what I see is topping in 2015, deep correction into 2016, another strong move up and than who knows... the "CBs are almighty" bubble bursting or this time is different.
I know such long time frames are not fro trading, but the charts are interesting and look like a good road map.
Short said I see a right translated 9 years cycle which is very bullish and EW a missing major wave IV so my conclusion the next top should be important with big decline, but I doubt it will be a major top.
SP500 cycles since the last secular bear low. The 9 years nominal cycle lasts usually 7 years. The bottom of the last bear market is probably an important bottom and 18 years cycle bottom(the green arrows mark 18 years cycle bottoms).
The move higher is right translated... really veeery stretched to the right side. The subsequent move lower for the 9 years cycle low should be compressed in time and probably it will last less than 12 months. Two options 2008 style crash or the cycle of a bigger degree is dominant that is why we see so stretched to the right side cycle. 2007 was 18 cycle top that is why crash fits better, but now this is only 9 years cycle top and a deep correction should be followed by another move higher for an 18 years cycle top - that will look much better.
And on really very long term scale I think one secular bull-bear cycle corresponds to 54 years Hurst cycle. The last 54 years nominal cycle low should be the low of the previous secular bear and if you count three 18 years cycles we should expect a secular bear low in 2023. Probably it will not be different this time... as always:)
The DAX chart looks easier to count Elliot waves. You can choose your scenario bullish(green) or bearish A-B-C (red). I think that the bears will be frustrated for several more years.
Weekly review
Short term view - I do not know... rather lower if you ask me.
Intermediate term view - the interesting part of the correction should follow soon.
Higher as expected, FOMC trying to say nothing and EURUSD higher as expected... but the price action is confusing. The move up is stronger than expected for a retracement, but the internal structure is overlapping and looks corrective.
Short term I do not know if SP500 will make another ATH or reverse below the last high.
Intermediate term - technically the correction has started on 25.02 if we see a lower high, or should start soon if we see higher high. Practically it does not matter - as I wrote many times you short a weak higher high with divergences or lower high and this is the current one. The trigger at the moment is if the price moves below 2085.
TECHNICAL PICTURE
Short term - here is trying to see a bullish scenario(green).... but we do not have two consecutive green days. How bullish is this? If you ask me it looks to me like a zigzag a-b-c(red).
Intermediate term - the retracement is too deep... so both scenarios are still in play. As I wrote it matters only where to mark the intermediate term top. If you are a short term trader we should have been long this week and if you are intermediate term trader you are waiting the current move up to finish.
Long term - the indexes are moving sideways since the end of November 2014... almost 4 months. I will repeat myself - no change... I know it is boring:)
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the oscillators has turned up, but still no change in the bigger picture. The indicators are still pointing rather to a correction than a new move higher.
McClellan Oscillator - moved above zero after mildly oversold level -60.
McClellan Summation Index - still on sell.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - nothing interesting.
Percent of Stocks above MA50 - moved higher, still below 75
Fear Indicator VIX - series of higher lows long term
Advance-Decline Issues - turned up, but still a lower high.
HURST CYCLES
Day 34... I think we will see a move lower to finish the 40 day cycle.
Week 7... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At day 5 of a setup... I do not know if it will be finished. It depends on which short term scenario will play out.
Intermediate term view - the interesting part of the correction should follow soon.
Higher as expected, FOMC trying to say nothing and EURUSD higher as expected... but the price action is confusing. The move up is stronger than expected for a retracement, but the internal structure is overlapping and looks corrective.
Short term I do not know if SP500 will make another ATH or reverse below the last high.
Intermediate term - technically the correction has started on 25.02 if we see a lower high, or should start soon if we see higher high. Practically it does not matter - as I wrote many times you short a weak higher high with divergences or lower high and this is the current one. The trigger at the moment is if the price moves below 2085.
TECHNICAL PICTURE
Short term - here is trying to see a bullish scenario(green).... but we do not have two consecutive green days. How bullish is this? If you ask me it looks to me like a zigzag a-b-c(red).
Intermediate term - the retracement is too deep... so both scenarios are still in play. As I wrote it matters only where to mark the intermediate term top. If you are a short term trader we should have been long this week and if you are intermediate term trader you are waiting the current move up to finish.
Long term - the indexes are moving sideways since the end of November 2014... almost 4 months. I will repeat myself - no change... I know it is boring:)
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the oscillators has turned up, but still no change in the bigger picture. The indicators are still pointing rather to a correction than a new move higher.
McClellan Oscillator - moved above zero after mildly oversold level -60.
McClellan Summation Index - still on sell.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - nothing interesting.
Percent of Stocks above MA50 - moved higher, still below 75
Fear Indicator VIX - series of higher lows long term
Advance-Decline Issues - turned up, but still a lower high.
HURST CYCLES
Day 34... I think we will see a move lower to finish the 40 day cycle.
Week 7... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At day 5 of a setup... I do not know if it will be finished. It depends on which short term scenario will play out.
Mar 20, 2015
Update
Update - huge gap and sharp reversal in Biotech 4% from the top.... wave 4 has begun?
The line in sand is now defined. The move lower yesterday was corrective so SP500 could try to make a new high, but now you know when to turn bearish.
And the Dow green-red-green-red... overlapping waves this should be a corrective move. Best case for the bulls new marginal ATH to finish the wedge.
Mar 19, 2015
Update
I think the red scenario is playing out although the SP500 moved a little bit higher than what I was expecting for a correction.
Europe is bearish DAX and CAC40 have impulse lower and now corrective wave sideways, RUT reached its target, so careful we should see a reversal here.
For the bullish scenario we should see another strong day for 3 of 3 today.
Mar 15, 2015
Weekly review
Short term view - bottoming before FOMC
Intermediate term view - I think the correction is already running
SP500 moved lower to the 2040 area, but the move is weaker than expected. Both scenarios are still possible and we need a confirmation before excluding one of them.
The first one ending diagonal - I want to see a strong move higher in the next days before FOMC and retracing at least 50%.
The second scenario the correction has begun and this is the first leg lower - I want to see lower low and bottoming before FOMC.
Now I think that the correction has higher probability - the indexes were weaker than expected and the move lower starts looking more like an impulse,TomDemark setup lower finished another sign that the move lower has legs, Market breadth is pointing that we are in the middle of a correction rather than a bottom, the same story with cycles. I will just wait to see what happens next week.
This week it was all about the USD and FOMC. Everybody front running the FED which caused another sharp move higher for the USD. The macro data are worsening and with the parabolic move in the USD I expect only bla bla from FED trying to postpone rate hikes. This should cause a move into the opposite direction for EUSUSD.
The USD reached my target and I am curios if we will see a major bottom or only a corrective move. If you ask me parabolic moves always end the same way - collapsing. The parabolic move in the USD caused parabolic move in the DAX moving completely out of sync compared to US indexes. Watching the charts I think I should change the degree of my EW and cycle counts. I expect the DAX and US to synchronize again - wave 4 for the DAX and correction in the US. The intermediate term has not change, but the current correction and the subsequent move higher should be from a lower degree.
This changes the long term picture - I expect normal correction 7%-10% April-May -> new highs September-October -> important top and 15%-20% correction.
TECHNICAL PICTURE
Short term - the next days the price should hint us what is going on.
Intermediate term - now waiting to see which is it. As I said I think it will be the red one... but I like to see a confirmation. It is not the time to go short anyway.
Long term - I have adjusted the sizes of the moves because I think the long term has changed.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - look like we are in the middle of a correction.
McClellan Oscillator - making higher low... short term bottom
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal
Bullish Percentage - sell signal, but still at high level.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - another higher low
Advance-Decline Issues - moving lower...
HURST CYCLES
Day 29..... either another two weeks to finish 40 day cycle or short 40 day cycle(29-30 days) and higher high for 5 of the ED which will be the high of the next 40 day cycle.
Week 6... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Setup lower has been finished. The move lower has shown strength. The last time we saw a setup lower was Sptember-Oktober 2014 and 200points/10% correction has followed.
Intermediate term view - I think the correction is already running
SP500 moved lower to the 2040 area, but the move is weaker than expected. Both scenarios are still possible and we need a confirmation before excluding one of them.
The first one ending diagonal - I want to see a strong move higher in the next days before FOMC and retracing at least 50%.
The second scenario the correction has begun and this is the first leg lower - I want to see lower low and bottoming before FOMC.
Now I think that the correction has higher probability - the indexes were weaker than expected and the move lower starts looking more like an impulse,TomDemark setup lower finished another sign that the move lower has legs, Market breadth is pointing that we are in the middle of a correction rather than a bottom, the same story with cycles. I will just wait to see what happens next week.
This week it was all about the USD and FOMC. Everybody front running the FED which caused another sharp move higher for the USD. The macro data are worsening and with the parabolic move in the USD I expect only bla bla from FED trying to postpone rate hikes. This should cause a move into the opposite direction for EUSUSD.
The USD reached my target and I am curios if we will see a major bottom or only a corrective move. If you ask me parabolic moves always end the same way - collapsing. The parabolic move in the USD caused parabolic move in the DAX moving completely out of sync compared to US indexes. Watching the charts I think I should change the degree of my EW and cycle counts. I expect the DAX and US to synchronize again - wave 4 for the DAX and correction in the US. The intermediate term has not change, but the current correction and the subsequent move higher should be from a lower degree.
This changes the long term picture - I expect normal correction 7%-10% April-May -> new highs September-October -> important top and 15%-20% correction.
TECHNICAL PICTURE
Short term - the next days the price should hint us what is going on.
Intermediate term - now waiting to see which is it. As I said I think it will be the red one... but I like to see a confirmation. It is not the time to go short anyway.
Long term - I have adjusted the sizes of the moves because I think the long term has changed.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - look like we are in the middle of a correction.
McClellan Oscillator - making higher low... short term bottom
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal
Bullish Percentage - sell signal, but still at high level.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - another higher low
Advance-Decline Issues - moving lower...
HURST CYCLES
Day 29..... either another two weeks to finish 40 day cycle or short 40 day cycle(29-30 days) and higher high for 5 of the ED which will be the high of the next 40 day cycle.
Week 6... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Setup lower has been finished. The move lower has shown strength. The last time we saw a setup lower was Sptember-Oktober 2014 and 200points/10% correction has followed.
Mar 7, 2015
Weekly review
Short term view - higher for a few days, but we need confirmation for a bottom on Monday.
Intermediate term view - I think we will see one more higher high, but first we should see confirmation for a short term bottom on Monday.
The pullback was not over as I have expected, but it takes too long and the short term picture should be updated.
It was easy so far with the 20 week cycle low, but we are getting closer and closer to an important top and it is getting more difficult to predict the short term moves...
I think the structure will look best as an ending diagonal and this will explain the bunch of corrective waves up and down. If you look at the hourly chart of Russell2000 and NYSE you will see a more clear picture with two legs lower of the same size. We need a short term bottom on Monday so that the move lower finishes as a corrective structure and as a part of a bigger wave 4 of an ED.
If the move continue lower for another day or two it will start looking like an impulse and the conclusion will be that a correction has already begun. We have all ingredients for that - cycles the right time to turn lower, EW could finish as an expanding flat(see Russell 2000 and the daily chart below), Market breadth long term divergences and turned lower on Friday, TA see the weekly charts and the divergences....
The next several days should give us the answer. Do not worry, there should be enough opportunities to go short if you want so patience.
TECHNICAL PICTURE
Short term - the indexes reached strong support level and should make a short term bottom on Monday. Than the structure will look like a zigzag(green). If the prices continue lower and break below support(red) this will be a signal for a weakness.... and the correction has probably begun.
Intermediate term - the ED wave 4 to around ~2040 and than wave 5 to ~2150(green). But we do not want to see a impulse lower or we should switch to the red scenario.
Long term - the short term moves has not changed the big picture, the next bigger move should be down.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - look bearish with long term divergences. It is not from this week, but now they have turned lower.
McClellan Oscillator - sharp move lower and bounce should be expected, but it is not a guarantee that another day or two sell off will not happen.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal. The next swing lower has begun?
Bullish Percentage - still on buy...
Percent of Stocks above MA50 - sell with multiple divergences.
Fear Indicator VIX - multiple divergences
Advance-Decline Issues - multiple divergences
Put/Call ratio - multiple divergences
NYSE New Highs-New Lows - multiple divergences
HURST CYCLES
Day 24... based only on cycles is difficult to say which scenario will play out.
Week 4 of the current 20 week cycle. Following closely the current 20 week cycle... it is definitely much weaker than previous 20 week cycles. We are nearing an important top.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Price flip an setup lower at 4. This is another sign of a weakness.
Russell 2000 hit 2043 the first target area... it is difficult to say if this was the top or one more move higher to the next extension 2153. It does not matter I think the next move will be to revisit the October low.
The DAX is the strongest index. It has decoupled so to speak and it is moving vertically... definitely a blow off phase. I think we should see a 7%-8% correction followed by wave 5 for a major top.
Intermediate term view - I think we will see one more higher high, but first we should see confirmation for a short term bottom on Monday.
The pullback was not over as I have expected, but it takes too long and the short term picture should be updated.
It was easy so far with the 20 week cycle low, but we are getting closer and closer to an important top and it is getting more difficult to predict the short term moves...
I think the structure will look best as an ending diagonal and this will explain the bunch of corrective waves up and down. If you look at the hourly chart of Russell2000 and NYSE you will see a more clear picture with two legs lower of the same size. We need a short term bottom on Monday so that the move lower finishes as a corrective structure and as a part of a bigger wave 4 of an ED.
If the move continue lower for another day or two it will start looking like an impulse and the conclusion will be that a correction has already begun. We have all ingredients for that - cycles the right time to turn lower, EW could finish as an expanding flat(see Russell 2000 and the daily chart below), Market breadth long term divergences and turned lower on Friday, TA see the weekly charts and the divergences....
The next several days should give us the answer. Do not worry, there should be enough opportunities to go short if you want so patience.
TECHNICAL PICTURE
Short term - the indexes reached strong support level and should make a short term bottom on Monday. Than the structure will look like a zigzag(green). If the prices continue lower and break below support(red) this will be a signal for a weakness.... and the correction has probably begun.
Intermediate term - the ED wave 4 to around ~2040 and than wave 5 to ~2150(green). But we do not want to see a impulse lower or we should switch to the red scenario.
Long term - the short term moves has not changed the big picture, the next bigger move should be down.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - look bearish with long term divergences. It is not from this week, but now they have turned lower.
McClellan Oscillator - sharp move lower and bounce should be expected, but it is not a guarantee that another day or two sell off will not happen.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal. The next swing lower has begun?
Bullish Percentage - still on buy...
Percent of Stocks above MA50 - sell with multiple divergences.
Fear Indicator VIX - multiple divergences
Advance-Decline Issues - multiple divergences
Put/Call ratio - multiple divergences
NYSE New Highs-New Lows - multiple divergences
HURST CYCLES
Day 24... based only on cycles is difficult to say which scenario will play out.
Week 4 of the current 20 week cycle. Following closely the current 20 week cycle... it is definitely much weaker than previous 20 week cycles. We are nearing an important top.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Price flip an setup lower at 4. This is another sign of a weakness.
Russell 2000 hit 2043 the first target area... it is difficult to say if this was the top or one more move higher to the next extension 2153. It does not matter I think the next move will be to revisit the October low.
The DAX is the strongest index. It has decoupled so to speak and it is moving vertically... definitely a blow off phase. I think we should see a 7%-8% correction followed by wave 5 for a major top.
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