Jun 14, 2019
Short update
In the next three weeks I am on the move so the next weekly update will be on 7-th of July, in July I will post the long term update too.
Only short update... in fact nothing happened this week - slightly higher to finish the first wave up, now we should see some kind of b wave.
Again as I wrote June should be up, after that we should see the indexes turning lower.
Jun 9, 2019
Weekly preview
One more decline on Monday to touch the neckline and 38% retracement followed by sharp reversal... as I wrote why should someone short a bottom? I hope now the non-believers understand what I meant with go long or at least take your profits. If the market wants to make a higher high ride it, if it makes lower high short it again at much higher levels - simple trading plan, low risk, no emotions.
After this vertical move the only pattern which makes sense is that we saw the top in May and the decline begun with a zig-zag... this is a bad news because the pattern to the downside will be difficult to predict and trade.
What is the alternative - if you count this week as the start of an impulse it will be finished in the 3150-3200 area. This is not c/B anymore it will be i/3. I do not see evidence to support such pattern.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two impulses higher with the same size which is corrective and support my view - expecting lower high. The only way to count this an impulse is extended fifth wave - I doubt it.
Do not count it automatically as w1 because of strength. In Feb and late Oct 2018 we saw explosive moves up too, which ended with another decline (see the daily chart).
Intermediate term - I have tried to explain with simple TA why this is a low... many did not want to hear, but it is playing out as expected. History(rectangles) says we should see 3-4 week higher even if the pattern is bearish. The main pattern which I follow for weeks is that we have reversal with a zig-zag(yellow) which means complex pattern to the downside. The trend line could be tested now only with ending diagonal to burn time June/July.... it is too early to predict such pattern. The green pattern for impulse higher points to much higher levels and does not make sense any more.
Long term - one more leg lower to finish wave IV from 2009. Expect complex pattern because of time and so far we have only corrective zig-zag lower.
MARKET BREADTH INDICATORS
Market Breadth Indicators - are turning up. Advance-Decline Issues never moved to oversold levels, which is unusual... the indicator says we are still in the middle of a move lower which corresponds to the main EW count a-b-c lower.
McClellan Oscillator - above zero.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - trying to turn up.
Bullish Percentage - turning up.
Percent of Stocks above MA50 - turning up .
Fear Indicator VIX - I want ot see another low in the 13-14 before the next explosion higher.
Advance-Decline Issues - in the middle of the range. It does not give a sign that the move lower is finished - no oversold levels hit. It looks like the bearish EW count zig-zag lower now retracement and final decline to oversold levels.
HURST CYCLES
For bullish right translated 20 week cycle I wanted to see shallow decline for 2-3 weeks. It was much bigger and longer and coupled with probable 40 week cycle high in May(discussed many times) the odds are higher that the next 20 week cycle will make lower high.
Day 4, it looks like the next daily cycle is running.
Week 1... possible 20 week cycle low at week 23.
Short term - I see two impulses higher with the same size which is corrective and support my view - expecting lower high. The only way to count this an impulse is extended fifth wave - I doubt it.
Do not count it automatically as w1 because of strength. In Feb and late Oct 2018 we saw explosive moves up too, which ended with another decline (see the daily chart).
Intermediate term - I have tried to explain with simple TA why this is a low... many did not want to hear, but it is playing out as expected. History(rectangles) says we should see 3-4 week higher even if the pattern is bearish. The main pattern which I follow for weeks is that we have reversal with a zig-zag(yellow) which means complex pattern to the downside. The trend line could be tested now only with ending diagonal to burn time June/July.... it is too early to predict such pattern. The green pattern for impulse higher points to much higher levels and does not make sense any more.
Long term - one more leg lower to finish wave IV from 2009. Expect complex pattern because of time and so far we have only corrective zig-zag lower.
MARKET BREADTH INDICATORS
Market Breadth Indicators - are turning up. Advance-Decline Issues never moved to oversold levels, which is unusual... the indicator says we are still in the middle of a move lower which corresponds to the main EW count a-b-c lower.
McClellan Oscillator - above zero.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - trying to turn up.
Bullish Percentage - turning up.
Percent of Stocks above MA50 - turning up .
Fear Indicator VIX - I want ot see another low in the 13-14 before the next explosion higher.
Advance-Decline Issues - in the middle of the range. It does not give a sign that the move lower is finished - no oversold levels hit. It looks like the bearish EW count zig-zag lower now retracement and final decline to oversold levels.
HURST CYCLES
For bullish right translated 20 week cycle I wanted to see shallow decline for 2-3 weeks. It was much bigger and longer and coupled with probable 40 week cycle high in May(discussed many times) the odds are higher that the next 20 week cycle will make lower high.
Day 4, it looks like the next daily cycle is running.
Week 1... possible 20 week cycle low at week 23.
Jun 1, 2019
Weekly preview
Lower but no acceleration as expected. What happened this week - the patten is slowly taking shape and it looks like zig-zag, the monthly candle looks very bad - big red reversal candle... constant selling from day one until the end of the month.
The same thoughts - we need to see the indicators/market breadth reset first before continuation lower. What to do with this zig-zag?
- bearish we have reversal - the final wave lower(for wave IV weekly) should play out as a big zig-zag and the first wave itself is a zig-zag.
- bullish - zig-zag is corrective structure and the door is still open for another leg higher. In this case I would count it as b/B with another rally to 3040 for c/B and big expanded flat. With many shares which already reversed and this ugly monthly candle the odds are low, but who knows.
I will watch closely for a long entry next week. If we see the price 300 points higher great, if it is weak and we see only 100 points higher I can live with that:) This is simple trading plan with low risk.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two legs lower with the same size or zig-zag which should be finished soon.... after that the target should be at least the resistance zone is 2860-2890.
The bearish count is 1-2 i-ii I am not big fan of this counts, never worked since 2009 it was always just that simple zig-zag.
Intermediate term - indicator which measures acceleration is the histogram. Examples of acceleration are the red arrows - the price just moves lower(or look what happens with crude oil). Currently we are seeing second higher trough with divergence which is the opposite of acceleration - it is slowing down. The price/indicator behavior is exactly the same like October 2018. The same setup has the DAX twice in 2018. In all three occasions the outcome is the same - the indicator has to reset(price higher) before continuation lower. I do not think this time will be different.
On the chart are shown the two options - bullish and bearish.
Bearish - if we see weak bounce for a few weeks unable to break above MA50 and resistance, pattern and time will look exactly like the Oct-Dec.2018 decline. June should be positive, but if the bounce is weak the next move will be lower to support and 68% retracement for 40 week cycle low - a/C yellow. The final decline for wave IV from 2009 should be one big zig-zag because of time and because it starts with corrective structure.
Bullish - second rally higher to finish wave B for huge expanded flat. It should continue until August, 1,38 Fibo extension for expanded flat points to 3040 as a target exactly where the trend line will be hit one more time. The Fibo measurements for wave B(1,38) and C(1,61) show perfect targets - the upper trend line and the 2150-2200 area, flat is more likely pattern than expanded triangle, so despite the lower odds at the moment I will not discard it until I see the bounce in June showing weakness.
P.S. for those trying to see H&S pattern I think the neckline is lower around the 2720-2730 area. H&S and a/C(yellow) targets are the same in this case.
Long term - one more leg lower to finish wave IV from 2009. If the decline already begun, zig-zag will fit better both time and pattern. The probability for wave B expanded flat(red) is still alive and can not be excluded at this point.
MARKET BREADTH INDICATORS
Market Breadth Indicators - in sell mode for a long time, some divergences(VIX,McClellan Oscillator), that is why it is more likely that the indexes are close to a bottom and not just starting with the third wave.
McClellan Oscillator - 7 weeks below zero with divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - nearing the 25 level where corrections make a bottom.
Fear Indicator VIX - lower high and divergence, I expect one more low before exploding higher.
Advance-Decline Issues - nearing the oversold level.
HURST CYCLES
Day 57... second very long daily cycles which is unusual. It feels like we have the 40 week cycle high which I was talking about.... and the 40 week cycle(bottom-to-bottom) consisting of three long daily cycles instead of four daily cycles.
Week 23... this 20 week cycle is getting stretched, smells more and more like we have reversal.
Short term - I see two legs lower with the same size or zig-zag which should be finished soon.... after that the target should be at least the resistance zone is 2860-2890.
The bearish count is 1-2 i-ii I am not big fan of this counts, never worked since 2009 it was always just that simple zig-zag.
Intermediate term - indicator which measures acceleration is the histogram. Examples of acceleration are the red arrows - the price just moves lower(or look what happens with crude oil). Currently we are seeing second higher trough with divergence which is the opposite of acceleration - it is slowing down. The price/indicator behavior is exactly the same like October 2018. The same setup has the DAX twice in 2018. In all three occasions the outcome is the same - the indicator has to reset(price higher) before continuation lower. I do not think this time will be different.
On the chart are shown the two options - bullish and bearish.
Bearish - if we see weak bounce for a few weeks unable to break above MA50 and resistance, pattern and time will look exactly like the Oct-Dec.2018 decline. June should be positive, but if the bounce is weak the next move will be lower to support and 68% retracement for 40 week cycle low - a/C yellow. The final decline for wave IV from 2009 should be one big zig-zag because of time and because it starts with corrective structure.
Bullish - second rally higher to finish wave B for huge expanded flat. It should continue until August, 1,38 Fibo extension for expanded flat points to 3040 as a target exactly where the trend line will be hit one more time. The Fibo measurements for wave B(1,38) and C(1,61) show perfect targets - the upper trend line and the 2150-2200 area, flat is more likely pattern than expanded triangle, so despite the lower odds at the moment I will not discard it until I see the bounce in June showing weakness.
P.S. for those trying to see H&S pattern I think the neckline is lower around the 2720-2730 area. H&S and a/C(yellow) targets are the same in this case.
Long term - one more leg lower to finish wave IV from 2009. If the decline already begun, zig-zag will fit better both time and pattern. The probability for wave B expanded flat(red) is still alive and can not be excluded at this point.
MARKET BREADTH INDICATORS
Market Breadth Indicators - in sell mode for a long time, some divergences(VIX,McClellan Oscillator), that is why it is more likely that the indexes are close to a bottom and not just starting with the third wave.
McClellan Oscillator - 7 weeks below zero with divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - nearing the 25 level where corrections make a bottom.
Fear Indicator VIX - lower high and divergence, I expect one more low before exploding higher.
Advance-Decline Issues - nearing the oversold level.
HURST CYCLES
Day 57... second very long daily cycles which is unusual. It feels like we have the 40 week cycle high which I was talking about.... and the 40 week cycle(bottom-to-bottom) consisting of three long daily cycles instead of four daily cycles.
Week 23... this 20 week cycle is getting stretched, smells more and more like we have reversal.
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