Trading cycle - sell signal. The price is below MA10, RSI is pointing lower below MA18. I am holding my short, it is down until proven otherwise.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - why this decline does not convince me.... there is too much churning around(futures the same), there is no technical damage like breaking support it is just trapped between the three MAs, 8 days later it still has not erased the last move up lasting only 2 days. This supposed third wave of C sucks so far. To erase the doubts and what RSI is telling(divergences without breaking the trend line at the oversold level) on Monday this third wave should gap lower and waterfall more than 100 points. It should take a few hours not many hours or days.
If we do not see this it is just w(flat)-x-y(zig-zag) for b wave. Or maybe it is b of a triangle who knows. Hanging on this theory because it will be great to see NDX completing this pattern.
Intermediate term - MA50 and MA200 are still holding, but I expect 50% retracement into July for 20w cycle low one or another way. Conveniently the two Fibo retracement levels are at support levels from last year.
Long term - now it looks like the low will not be tested which is very bad news - the main scenario is the bull market is over and we are in another B wave of higher degree compared to 2019. This is the pattern which makes most sense. Those interested in cycles look at Benner cycles to see how the pattern fits perfect.
MARKET BREADTH INDICATORS
Market Breadth Indicators - are in sell mode. Any jump higher should be short living and reversed quickly.
McClellan Oscillator - slightly oversold.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - turned lower sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - sell signal.
Fear Indicator VIX - another spike expected, just not sure at the moment if there is more to retrace.
Advance-Decline Issues - weak, in the middle of the range.
HURST CYCLES
Short term cycles - we have possible 20d cycle high and now declining into 20d low. If we see move higher this is probably 40d/5w low.
P.S. This green bar the high on 19th of June is wrong data from investing.com in fact it is red bar lower.
Week 14 for the 20w cycle. It seem the decline into 20 week cycle low is running, but still not 100% confirmed price and RSI still has not broke below the MAs.
Most likely March was the important low and I have already changed the chart... I have not seen so short 40w cycle only 24 weeks, maybe because of the speed of the decline. There is no perfect tools cycles are great, but not perfect as every other tool.
Thanks Krasi. I was waiting for your post before commenting (you were very skeptical about the red count above). Shorter term I have EURUSD, AUDUSD, crude oil and SPX all telling me the same thing, decline into Monday/Tuesday before we bounce. Even JNK made a lower low, and it usually leads SPX. /NQ also has a potential H&S in the shorter timeframe. The setup can't get better than this. I was skeptical as well that the 20d would peak so early, but now the shorter TF analysis is confirming.
ReplyDeleteP.S.: Sometime I wonder why you bother responding to trolls. Just leave them and let them show the world how clueless they are.
Maybe something like this - https://imgur.com/a/xloZpmM
DeleteAnother 2 days lower but not a big plunge and bounce.
My timing is based on futures, first low should happen overnight and likely one or two more lows after that (latest by Tuesday) before a bounce. If we collapse on Sunday, frankly I'll still be open your previous week's red count (possible retest of Mar '20). Otherwise I think your current yellow count makes the most sense now.
DeleteI guess you're right Krasi. The lower TF cycle has turned right translated, so we should bounce now. Let's see how far this bounce goes.
DeleteWhat are the benner cycles?
ReplyDeletehttp://www.davidmcminn.com/pages/brenfib.htm - more information
Deletehttps://iaminwallstreet.com/do-not-forget-the-benner-fibonacci-cycle/ - updated years until 2037
Pretty accurate, missed 2009 but has 2011 where some Hurst guys count the low.
Just a curious question Krasi. Is there any way/method to incorporate both Hurst and Benner cycles?
DeleteIt needs serious study.... every miss and hit of both cycle models and how and when they deviate. I am sure this will produce interesting results.
DeleteQuick and dirty take both into account and some thoughts:
- Hurst and Benner are describing the same rhythm - 20+16+18=3x18=54 / 10+8+9=3x9 Their models are not so different, just the approach is different.
- I have tried to see how Hurst cycle look like 100 years backwards and I see that the 18y cycle vary 16y/17y/18y/19y and inside this cycle often it counts better 5x3-3,5y instead of 4x4,5y which causes the variations. I think Benner found the same rhythm, but in a way which incorporates this variations.
Probably we will see something like Hurst 2002/Benner 2003 - the fix rhythm says 2020 variations a low one year later. Judging by the pattern so far, the difference between the two lows should not be big, but Benner cycle describing the correction better - high 2018 and low 2021.
This is very interesting indeed. There are periods when cycles are longer and periods when they are shorter. I do noticed that cycle duration changes over the decades, maybe there IS a proper rhythm to that. I've been monitoring Benner cycle for some time but never took a serious look at it. Thanks for sharing your wealth of knowledge to all of us.
DeleteBy the way Krasi, take a look at SPX from 1965 to 1976. You'll notice there's an expanding triangle pattern. Megaphone pattern is really just the market attempting to consolidate, but the inflationary (Fed) and deflationary forces are causing whipsaws above and below. It's just a rare form of triangle that is caused by interventions IMO. This may be what's playing out now:
DeleteJan '18 = May '65
Oct '66 = Dec '18
Dec '68 = Feb '20
May '70 = Mar '20
Q3 '71 = Now?
Jan '73 high = Late '20 (your wave B high)
Q4 '74 low = Final wave C low in 2021
the ABC yellow of your chart of long term will be only the (A) of all the correction?
ReplyDeleteYes, this should be part of much bigger correction.
Deletethere is another option, august 2019 40w low and march 2020 too, around 32 weeks each one, I think this is better than 24 weeks for a 40 week cycle
ReplyDeleteThank you !! I have been saying this all along only to be ridiculed..
DeleteJP
Yes, but in this case the second 20w cycle from the previous 40w cycle is only 10 weeks long and the cycle low is not at the pattern low the triangle.
DeleteThere is no perfect tools that is all.
JP I can not bet on exceptions when a tool should not work as ii should.
DeleteNo problem I very much appreciate your work. Thank you.
DeleteThere were signs which I missed for sure. I am still learning.... I have started to really understand EW and cycles and to combine them in the last 1-2 years.
DeleteIn your long term the wave B will be the shortest in time of the ABC, it is not possible in a flat
ReplyDeleteThen some variation of the idea. I will follow time.
DeleteP.S I have not found the rule.
Neely`s theory
DeleteWhy are you waiting for technical damage or wave 3 to occur before confirming your trade? By the time that occurs it will be too late you will have missed the meat of the move. Better to be short right now and wait for stop out or wait for target to be reached which is atleast 2800.
ReplyDeleteI think this move is a double zigzag that started from January. The March move was b wave of expanded flat and looks like the main move but it is not.
I am waiting to short more because the downward trajectory looks like its exhausting not accelerating as it should. The point drops are decreasing with each drop. So why get excited?
Delete- Kali
You can still accelerate next week. The move just started and we hardly dropped. You haven't given enough time for the move to play out to see how far it can go down.
DeleteThis are two different things - trade is short, I hold my short, I have closed long volatility just on time. I am just thinking loud that acceleration lower is suspicious.
DeleteKrasi,
ReplyDeletethe move down doesn't make too much sense for a big fall now.
The fall from june 9 - 11 took the SPY futures down 300 points. That was the first wave of fall supposedly. I agree with that.
Then June 24-25 too futures down 120 points as the wave i/iii. Substantially smaller than expected.
Now the current wave iii/iii on June 26 falls 80 points? The rate of decline which is hall mark of these moves do not match up. Why would the rate of decline decrease as we are supposedly entering deeper into the supposedly stronger sell off? It does not equate.
Also, how could we explain nasdaq breaking the high of wave 1? That does not equate. All said, another higher high then fall would make most sense.
- Kali
Maybe your count is wrong. This is not an impulse from June 8th, it is a zigzag. We haven't started iii of 3 in the C wave yet.
DeleteMaybe this is just i of C and pop up for ii of C then the acceleration.
DeleteNew high does not make much sense time and market breadth does not really support such development.
Bull Divergence on mid time frames still bothers me. We're also right at support for some of the indexes. Many thanks Krasi.
ReplyDelete3800 thats possible in s&p for this year???
ReplyDeleteWith my current analysis I can not see it happening.
DeleteIf the long term chart above is correct, how about the 4 year low you in summer of 2020? Thanks.
ReplyDeleteIt is taking too long so I am skeptical.... but lets see what comes lower in July.
DeleteWhat about Gold, will it make new highs?
ReplyDeleteGold is making 9y cycle high it will go nowhere.
DeleteKrasi, why do you say bad news in the long term, the low Wil not be tested?
ReplyDeleteWhy, it's bad?
Because this will mean with high probability the bull market is over.
DeleteDo you think is it a good idea go short in gold from this zone?, what would be the target in price and time ?
ReplyDeleteDifficult to say, it should be corrective move not a plunge, the previous lows around 1450 should be tested. Overall not some huge profits and for traders in and out.
DeleteAlways an interesting read with interesting ideas. Thanks for sharing your thought and ideas.
ReplyDeletenew supports and analysis in:
ReplyDeletehttps://analisisbolsa.com/donde-estamos/
I think the SR9 is very important in the daily chart of the SP, it can be a target for the move down of July because if the SR2 breaks there is no more supports and with a high probability sp will go down to the SR9
This was the initial idea until last week... it just seems time is running out for such decline - we will see.
Deleteimportant moment, nasdaq is in SR0, possible rebound but if not it will go down to SR1
DeleteI think in one wave Up, ?no Krasi?
ReplyDeleteSee the chart from the second comment at the beginning - I suspect 1/C as diagonal.
DeleteI dont see.
Deletelike this? https://invst.ly/raar7
DeleteYes, like this. My chart from the weekend the cash index - https://imgur.com/a/xloZpmM
Deleteah good, thanks for the chart!
DeleteYour chart is blurry
DeleteA very good rebound from SR0 of nasdaq
ReplyDeleteHi Krasi.
ReplyDeleteI think in one wave Up, and 2200 yo middle of june.
Thats possible???
What is SR0, panete???
Not very likely it takes too long.
DeleteKrasi,
ReplyDeleteIt looks like one more move higher has started after breaking the downward trend line. What do you think this move higher will take us?
- Kali
I think w-x-y and slightly higher high 3160
DeleteIt looks like TSLA is going straight to infinity :-)
ReplyDeleteJust on time for the next important top.
DeleteYes, other wave Up.
ReplyDeleteNot a big surprise...
DeleteGoing to retest 3160 than crash. Looks like a B wave, C wave down should be vicious. No idea how far down we should go but I'm guessing atleast 2700.
ReplyDeleteThis is the plan, now waiting to see if it will work.
DeleteSo, the third graph is the best plan?
ReplyDeleteSorry, the fourth one?
ReplyDeleteI think the last 20w high was in february, so the next week or the next one will be the 20w high and then go down
ReplyDeleteIf we see higher high.... very questionable when I see how the tech sector looks like.
DeleteWhich one of the graph is the best scenario?
ReplyDeleteI do not understand what you mean.
DeleteKrasi uvxy down target looks like 29 now youf thoughts
ReplyDeleteThe Fibo measurement shows around 29,50
DeleteKrasi are you counting the move up this week as a 5w cycle bounce? Thanks!
ReplyDeleteOnly if it continues next week for another 2-3 days or longer. If it is completed this week or Monday rather 10d high.
DeleteI think we sell down now. The x wave possible starting now Krasi?
ReplyDeleteMore patience on the cash index I see w-x-y or impulse nd both need one more wave for completed pattern - https://imgur.com/a/d16V6Es
DeleteAh ok thank you
DeleteNasdaq =double top
ReplyDeleteMore likely ED - see the link above the second chart.
DeleteOther indices are weaker and look like a triangle. If we do not see one more wave up the leg up from this week will end up as a-b-c and triangle for b wave will be the most likely pattern.
ReplyDeleteWell done Krasi. All your targets hit to perfection!
ReplyDeleteLets see if a reversal follows... even if it does not reverse, at least we did not sell the low:)
DeleteI bought uvxy 28.73 and 29.60
ReplyDeletewhat's your sell target on uvxy
Deletelooks like we hit it!
ReplyDeleteThanks Krasi!
ReplyDeleteAnother wave up in Index?
Go to ATH?
Only after a correction is completed. We could see more up next week to test the June high, but I do not think we saw the 20w low already.
DeleteKrasi, look at the obv, we can see that a lot of money enter to the indices, that means we are going more up and up
ReplyDeleteLook at NYSE and DJ and you will see the tragedy. Exactly 5 shares distort the whole index 22-23% weight. I do not know how many times to repeat it the market is not AAPL, five stocks will not save it.
DeleteIt's a very bullish sign
ReplyDeleteGood luck analyzing volume.
DeleteKrasi, How long can wave 2 last with respect to wave 1?
ReplyDeleteEW has no rules for time.
DeleteDo you think 8 to 15 june was wave 1 and now wave 2?
DeleteNo, this assumes impulse lower, which means retracement and another impulse lower. Cycles are showing a low in a few weeks.
DeleteDo you have any analysis that shows a major low in Sept/October? or is this next low in the next 2-3 weeks the major low for the foreseeable future?
ReplyDelete