Short term - wave a hit 38% retracement and c 50%. Now we should see something lower. If we see impulse lower or more than 62% from c retraced(the red line) then for sure this leg up is over. The bullish case I can see is X wave and another zig-zag up(the green channel up). Neutral scenarios are bigger zig-zag lower for a flat or triangle. The bearish scenario is wave B finished and C to new lows begin.
Intermediate term - the minimum target 50% retracement has been reached. With a zig-zag there is a few possible options described above. We can only guess until we see the price action for another week or two. I think this move up should take more time so the green one or alternate the yellow scenario.
Long term - similar to the daily chart we have to wait for a while for the pattern to be revealed. No need to guess, I am just waiting patiently for late May/June to see how the situation looks like.
MARKET BREADTH INDICATORS
Market Breadth Indicators - some are showing extreme overbought levels which usually means strength, but I think it is early to talk about strong buy signal. More likely it is caused by extreme depressed levels before that.
McClellan Oscillator - extreme overbought.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - extreme levels, buy signal.
Percent of Stocks above MA50 - waking up.
Fear Indicator VIX - expecting to see one more lower high for the VIX before the indexes complete the decline.
Advance-Decline Issues - still below the trend line connecting the highs since 2019 suggesting this should be just counter trend move.
HURST CYCLES
Daily(trading) cycle - buy signal, the price and RSI above the MAs. It was expected for the last two weeks, now it is obvious. From low-to-low we have 35 trading days, now we have 36 trading days high-to-high so do not fall in love with this buy signal.
Hurst cycles - I think wee should see a move lower for 20d cycle low and one more high for the 20w cycle high
Week 10 for the 20w cycle. Now expecting 20w high followed by move lower into the 20w/40w/18m cycle low.
Those who think this is 40w low - this is 100% wrong. The expert David Hickson switched to 20w low - only if we have some triangle.... more likely wrong too, making the same mistake like the EW guys - getting fooled by the amplitude. Cycle analysis is about time and not amplitude. Amplitude changed expanding since 2018, time has not changed.
Krasi what's your take on XAUUSD ?
ReplyDeleteOne more decline to 1400-1430 for flat correction.
Deletekrasi are you going to go short from here until end of may?
ReplyDeleteI have small short and waiting to see what happens. I think it will take more time this upside move, but I yes I plan to be short for one more move lower.
DeleteAwesome!
ReplyDeleteI think the first option is going to happen. The correction should end by mid-May. Those who are expecting a prolonged bear market are going to be dissapointed.
VIX is the easiest to count rn. We had one wave in late Jan followed by 2nd wave in early Feb than 3rd wave and now we are in 4th wave.
The bear market will come later. I am checking the DJ30 shares the majority with corrective patterns.
DeleteVIX is interesting it is ignoring the move up and refusing to come down to normal levels which means the decline is not over.
we already went down so fast. I expect something like an X and then more upside to confuse everyone. Thanks as always for your charts!
ReplyDeleteCombinations are difficult to predict, but I think that more time is needed too.
DeleteLets see what happens next week.
Can we see a low like we did on 18 March ? And is this better time to short the market ?
ReplyDeleteWhat happened on 18th of March? There is nothing special.
DeleteThe better time for a trade is always when there is confirmation. Now I can only speculate that there is a-b-c and we will see something lower.
Really excellent and concise summary of market situation imo. Can feel my FOMO emotions kicking in which is usually a good sell signal. Still, quite a lot of bullish signals too. Confusing, like you say. Another indicator I quite like is the percent stocks above the 200 day MA. https://www.tradingview.com/x/TIAfx8R0/ . Coming up to an interesting level there.....
ReplyDeleteWhen we talk about "the system" a good article about how the financial system works - https://www.zerohedge.com/markets/down-rabbit-hole-eurodollar-market-matrix-behind-it-all
ReplyDeleteI have read similar pieces about the "Petrodollar" labeled as conspiracy theories - the article above confirms how the system works, at the end it is the same.
It is all about the USD as life blood of international trade and world economic activity. USD liquidity has to be maintained at all costs.
Now you know why USD acts so crazy now and back in 2008. Now you know why the QEs. No they have nothing to do with stock market, the stock market is a side effect the liquidity tide lifting all boats.
It is all about keeping the system alive, keeping USD liquidity, keeping the debt market from imploding. The stock market is a sideshow.
Imho the system have started to crumble in 2000, since then we have more and more crises with more and more trillions needed to solve the next problem. This can not work for ever.
Imho in 2018 the end game has began. I can only guess how the end game will look like:
- pumping liquidity until the rest of the players lose confidence and the currency is destroyed(as reserve currency)... I do not see alternative of the USD at the moment.
- system reset first trough deflation(debt destruction not what you buy at the store) then through inflation to solve the debt problem.
Trading how I see it:
- 2020-2030 - several moves up and down with amplitude minimum like 2019/2020 or bigger. Culmination 2027-2030 deflation phase. Buy and hold is dead, traders who can read the charts can make a lot of money.
- 2030-2040 - strong inflation phase commodities/PM is the place to be - buy and hold:)
I am skeptical, I do not see "back to normal" neither the economy nor the stock markets. We have to get used to crazy moves - the new normal. This virus hysteria is for me just the kick-start of the end game. Similar historical periods are associated with war,hunger,poverty I just pray this time it will be different.
"commodities/PM is the place to be", What would those be? and how to invest in them?
DeleteI will buy oil companies and gold miners shares.
DeleteThe other options are Gold/Silver ETFs, physical gold(the problem you have to store it somewhere).
Read the same article. Clearest explanation of the Eurodollar I have read and now reckon I half understand it. Interesting times indeed.
ReplyDeleteKrasi another option: 20w low 28 february?
ReplyDeleteNot very likely - weak bounce from 20w low 1 week and from 5w low very strong for 3 weeks.
DeleteThe March low is looking more and more like a 40 week low and potentially an 80 week low from the December 2018 low. We'll see
ReplyDeleteIt doesn't mean we explode from here into some crazy upside projections. All it means is they may squeeze the shorts for a good 2-4 months before they drop the ball. we'll see
ReplyDeleteThe scenario i dread is sideways choppy 2600-2800 range for few months before next leg. Nightmare trading it will be.
DeleteOn balance, given the FOMO in tape think still decent odds for a reversal below 2800 ES / 8450 NQ.
It is explained above - this is not 40w low, this will take 6-7 months sideways move not 2-3.
DeleteWorst case 20w low for a triangle weekly chart.
Probably a wedge for wave c - https://invst.ly/qfsnv
ReplyDeleteOr this the second leg is zig-zag and c is a wedge - https://invst.ly/qf-zo
DeleteWhat is your basis for gold price going to 1400?
ReplyDeleteThe moves are corrective, double RSI divergence daily and weekly.
DeleteI think gold just finished it's B wave up - now C should fulfill 1400, if not lower.
DeleteCan we say that the 4 year cycle high is in this lower high?
ReplyDeleteThis does not make sense at all. It was most likely in 2018 when the correction begun.
DeleteHave you heard about harmonic elliott waves? Basically 5 waves are made up of zig-zags https://medium.com/@castawaytrader/the-classic-elliott-wave-theory-is-dead-long-live-the-modified-and-better-elliott-wave-theory-ca2e02f238b3
ReplyDeleteI noticed this pattern alot when I started wave counting, the subwaves are most of the time 3 waves not 5. Classical EW would call that WXYXZ but it is so common that I think this new wave counting method may be better.
To clarify this counting method says 5-wave impulses are made out of 3 wave subwaves. So wave 1,2,3,4,5 are zigzags.
DeleteFrom what I saw(videos on Internet) he is counting waves which are not impulse as impulse and EW fails.... a lot of wrong assumptions for EW, for example LD/truncation are again EW failure - for me they do not exist just guys which can not count waves.
DeleteNot every move is impulse, I do not understand why everything should be forced to be impulse and EW fails - great conclusion. 11 waves is corrective structure, he just found more comfortable way to count zig-zags.
This zig-zag moves are common for shares, so maybe for shares is better I do not know.
I agree only that trading bases solely on EW does not work so good.
strong tape.. fwiw a convincing upside breakout of the rising wedge from the march low will confirm me that the march low was a 40 week low and the next important low is around the October/November election time. but before that low shorts will be squeezed big time. lets see if we do break the rising wedge convincingly next few sessions.
ReplyDeleteThere is no 40w low wake up.
DeleteThis much is clear to me also Krasi. Thanks it's good learning following your blog.
DeleteHowever, there is possibility of testing 2950 (61.8% retracement level) before heading lower. What do you think mate?
This will be probably the yellow path triangle with possible 20w low in March.
DeleteKrasi. I'm just a meager guy here. I've read this article which was forwarded by a friend. It's a little over my head. My friend said the s&p would drop to 2500 or 2250 which it did, and said the market should retrace 50% of drop then "retest lows" Where do you see the s&p droping back to? Thanks for your time.
ReplyDeleteIf I see the article I can say more, with the information from you it looks like the simple zig-zag pattern red on the third chart. I guess Y=0,618xW or currently around 2100-2150.
DeleteKrasi, was wondering your take on Bitcoin? Do you think it's worth buying? Or do you think is it going down 90%+ from the euphoric highs of 2017 like the dot-com crash? Thank you
ReplyDeleteI do not follow it, quick look - it does feel like the decline is complete. I would rather wait.
DeleteMy mistake does NOT feel complete.
Deleteah yes! to me as well. Good - maybe I'm learning :)
DeleteCrude has made new lows, how do you fit the 20w cycles?
ReplyDeleteI count the previous 20w low in February so most likely the middle of the cycle 10 weeks.
DeleteDo you mean this low is 10w low?
ReplyDeleteMore likely the previous low was 10w low(7 weeks length) and now the second half is running.
DeleteAnother 10 weeks look too long to me. Vertical moves usually lead to shorter cycles.
So it's time to buy?
ReplyDeleteTime to buy what?
DeleteAre you still thinking impulse high to 2950?
DeleteSorry i am talking about crude oil
DeleteCrude oil buy is ok but short term.
DeleteTo Dealer I do not see impulse just corrective move. It is possible, first lets see what happens to the downside.
Thank you for your work
DeleteThanks for the response. I guess article was wrong word. I meant this page with current charts. Thank you.
ReplyDeleteI'm curious to see your long, long term count for DJI from 1929 top. Classical EW theory says the 4th wave of one lesser degree from the 1929-1932 crash occurred from 1962-1970s, and the wave we have had from the 1970s is an extended 5th wave. I don't think there is any debate about that, most traditional EW specialists agree on that. The actual subwave EW count from the 74' low to now can get murky. If that is the case than the next crash of equal degree to 1929-1932 would bring us down in that vicinity of around DJI 1000.
ReplyDeleteWhat do you think about that? It's hard to imagine but according to classical EW theory that is what is expected. That would be an extraordinary collapse.
Here is a chart in pictorial form: http://www.acrotec.com/dow.htm
DeleteThis seems to be the count that makes the most sense but of course may be wrong. There doesn't seem to be any way of counting it without having an extended 5th wave of some degree. Elliott wave guidelines/rules say extended 5th waves retrace most if not all of it.
I do not count such long term charts - it is nothing more than a guess and useless for trading.
DeleteThere is different counts - forget this consensus "traditional EW specialists agree". I saw what they can in the last two years.
I would say below the low 2009 - 400-500 for SP500 this is already 90% decline from 4000-4500.
I do not believe in 99% decline.
For a 20w low in March there is a problem: how do you count the two 10w cycles of this 20w cycle?
ReplyDeleteIf 2 december was 10w low then the next one last 16 weeks, too much
This is not my count - ask David Hickson he is posting videos in youtube.
Delete
ReplyDeleteHey Krasi any updated charts or still with this one?
https://invst.ly/qf-zo
The first one https://invst.ly/qfsnv looks better, but still needs to e confirmed.
DeleteThabks
DeleteAnd the futures explode the other option after all:)
DeletePredicting the future is not so easy:)
Krasi, they arrive to the C top?
ReplyDeleteHow I see it - https://invst.ly/qh3r4
ReplyDeleteMost likely triangle and final thrust. Now the price is hitting resistance, the two legs have the same size and time roughly w+x=y.
Thanks a lot for answering
ReplyDeleteThe alternate option after all now showing it on the cash index - https://imgur.com/a/vE4tRUL
ReplyDeleteH! KRASI, SOX is at 1700 = 0.618Fibo of the entire descent, does that mean it returns to ATH?
ReplyDeleteThank you
Not necessarily, what I know more than 62% retracement and it is not b for a zig-zag.
DeleteIt could be wave2,flat,triangle,X wave....
I wanted to mention it this weekend for the NDX for those who think the indexes should go much lower.... now this does not look very likely.
Looking forward to your weekend update..
DeleteThe entire move from the bottom is an ending diagonal not a WXY. It's C for an expanded flat that began on Mar 12th.
ReplyDeleteYou have a lot of fantasy:
Delete- ED with w4 which does not overlap simply because there is no w4.
- Wave a several hours and wave c several weeks... really.
- wave b twice the size of wave a
I think patterns and shapes are more important than time. ED wave 4 doesn't have to overlap
DeleteLook at Russell, ED is much more clear in small caps
DeleteTime does not matter, no need for w4 to overlap in ED, making up waves which does not exist..... sorry but because of such experts ew has bad name.
DeleteOnly two legs up end of story - http://schrts.co/jPQDKiAQ
If there is expanded flat it was finished on 26th of March then X.
Delete