On the daily chart I am showing the patterns I find best if the move from March is complete or one more leg up for 40w high. I have chosen this two because they will work with most of the other indices. We have to wait and see the coming decline to confirm one of the patterns.
From trading perspective as always wait for sell signal - even if the move is not complete with 2-3 weeks lower small profit is very likely and if we have reversal we will make a profit.
TRADING
Trading cycle - buy signal, but we have day 29 and very mature high-to-high count so I will not be surprised if we see sell signal triggered next week.
For reversal we need to see bearish final 1/3 of the cycle. Brake below the first line(last 5w low) confirms 10w cycle lower is running. Brake below the second line(the 20w low) will confirm the 40w cycle turned lower.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - really messy move like the whole one from March. I do not know if we wil see two more bounces in the wedge or not. At least the break point is clearly defined.
Intermediate term - w-x-y counts, the red one for completed pattern or yellow for one more high. X(red) is smaller than the two b(red) waves as it should be and the trend line connects the b waves so it looks good... but the last leg does not really look like impulse. If it is corrective maybe Y as a flat and 40w high later this will fit with cycles very good.
We have MACD and RSI divergence so we should see something lower and this lower will give us more information.
Long term - I think the bull market completed in 2018. Since then a bunch of corrective waves. Currently watching this pattern... but with corrective waves often you have to adjust so stay open minded.
Main scenario for now wave a up and wave b starting soon and moving lower into 40w low November/December.
MARKET BREADTH INDICATORS
Market Breadth Indicators - do not react at all to the last rally from late July, weak with divergences.
McClellan Oscillator - above zero... the same indicator for SP500 spent the whole time for the last rally below zero, not good.
McClellan Summation Index - turned up, but with divergence.
Weekly Stochastic of the Summation Index - buy signal, but the same indicator for SP500 turned lower with divergence.
Bullish Percentage - not reacting, with divergence.
Percent of Stocks above MA50 - turned up, with double divergence.
Fear Indicator VIX - closing the gap.
Advance-Decline Issues - turned up, with double divergence.
HURST CYCLES
Short term cycles - 5w low as expected and now this should be 10w high followed by a decline into 10w low. Day 12 so there is enough trading days for 20d/10w high, but it could take a few more days I can not say.
If late June was 20w low and you extrapolate the first 5w cycle the low of the 40w cycle is exactly at.... 3-4th of November interesting, isn't it:)
Week 6 for the 20w cycle. 20w low late June looks much better so I will follow this scenario.
What is your target for the 40 weeks low of November?
ReplyDeleteI would say 50% retracement.
DeleteOnly?, I expect C wave to around 2200
DeleteCycles do not support C wave.
DeleteI won't be surprised frankly if the next two 10w low both bottomed at the 200dma area.
DeleteYou think gold has started a reversal based on Fridays price action?
ReplyDeleteI would wait for RSI divergence on the daily chart.
DeleteI was hoping you wouldn't say that ��
Deletecheck this out:
Deletehttps://twitter.com/PolemicTMM/status/1292711841869762560/photo/1
Some fall in gold today
DeleteGold and Silver look like third wave lower, but still 4 and 5 needed to confirm impulse.
Deletei'll ask about this tomorrow :)
DeleteYou think impulse is confirmed?
DeleteFinal wave 5 another lower low is needed.
Deletemy count has ended with a wtf wave
ReplyDeleteIt looks like this to me - https://invst.ly/rr5z-
Deletethanks, that makes sense
DeleteI think we'll go deeper down first in the next 2 days maybe for wave 4 low and then the final wave 5 up (probably into OPEX). However NQ is hinting time maybe running out, so we'll see.
Deletekrasi, was that it?
ReplyDeleteAs described in the post above:
Delete- with very high probability 10w cycle high, it looks like impulse lower right on schedule.
- wait and see the decline in the next two weeks to confirm or not 40w high and the end of the move from the March low.
Looks like a normal 20d low dip for now which may complete tomorrow. I'm looking for a backtest of 1 hourly 200ma in futures. It's getting late in the 10w though.
DeleteThanks, gold was impulse you think? I can count 5 waves there...
DeleteI think the next week 10w low and end August 40w high and then fall to November in 40w low
ReplyDeleteThis is too short, there is one more 20d cycle for 10w low so the end of August should be a low and higher in September.
DeleteSo yesterday 20d low?
DeleteATH
ReplyDeleteThe liquidity amazing
ReplyDeleteBeck in Feb these types of ATH and Liquidity is amazing posts were common, then bam 40% drop. Be careful!
DeleteThere is nothing bullish in corrective waves they always end the same way - fully retraced.
DeleteIt is amazing that you have learned nothing when saw the lesson live just a few months ago and you continue to repeat the same bullshit.
looks like A - B on /es. back testing trendline
ReplyDeleteI would say 5/c
Deleteok, my stops agree with U
DeleteNasdaq is not correcive
ReplyDeleteAre you sure? Even if it is an impulse part of what is it?
DeleteHi Krasi, what says a wave is corrective when we don't know how it will shape in the future? I understand the 2019-now corrective part but how do you determine that the current structure is also corrective and mostly retrace?
Deleteits entirely corrective.
Delete- kali
It is not an impulse because there is no wave 2 there is no wave 3 and the future can not repair the past.
DeleteWhat I see for NDX - https://invst.ly/rsn09
DeleteExactly in the middle where the strongest wave iii/3 is expected you have a pattern dividing the rally in two distinct legs.
ok top? well. I'm short and ready to be stopped out :L
ReplyDeleteKrasi,
ReplyDeleteSo I am a bit puzzled by the forecast. Are you saying that we are set to continue higher for another 9 days? I see your charts indicate that we should be headed lower for several weeks not higher.
The problem with trading with forecast is that it gives you a tremendous bias which prevents you from making money trading on a daily basis. For instance, yesterdays drop was abc. Todays rise in my view was also abc. In reaching yesterdays highs was an excellent opportunity to take short position as risk of being wrong was small compared to the gain. Also, on a big down move, the retracement trade provides a good opportunity to make money with a stop at previous low.
I enjoy reading your blog. But I guess I am still trying to piece together how to use it on a practical trading basis. The choppy moves on nasdaq has been excellent for using abc - abc - drop. Or abc - abc - rise. This has worked incredibly well.
I think the allure of shorting an over extended market is very tempting. The idea of getting a huge return on daily candles is fantastic. But aside from such an allure, in all practical trading sense, it does not yield to profitability. I trade full time now and I use daily, 4 hour, hourly, and 5 min candles to figure out the true pattern and trade the patterns up or down. Many times, I am surprised. Those surprising moves that catch traders off guard tends to be the best trades to take as too many people are crowded in the trade.
Sorry to be long winded, but I feel as though you have been calling for an entertaining big drop for awhile without it materializing. Its thought provoking for sure but if one were to trade on such ideas, it would lose money very consistently.
I think maybe best discussions on trading techniques in a given market maybe more helpful instead of predicting. I know I make more money reacting to moves instead of predicting.
- Kali
Kali, Elliott Wave is all about predicting based on probabilities.
DeleteYou are mixing two different time frames and you do not make a difference between analysis and trading which are two different things.
DeleteI agree with you Kali - the forecasts can get in your head and create a bias. when you see a big drop in the next week or two being forecasted, it's tougher to to take new long positions. I think that we all like to see projections, but that's a tough task to do accurately on a consistent basis.
DeleteAs humans, the ego always seeks certainty and thinks it knows what will happen. When we lock into forecasts and a bias, it's the worse thing you can do as a trader. I think it's a lesson every trader will eventually learn if they watch the market long enough. Nobody knows what will happen and you have to stay open and flexible.
DeleteThe duration of the 20d and 40d cycles are including weekends and holidays?
ReplyDeleteWhat is its average duration?
Yes, 20d and 40d refers to calendar days including weekends. In trading days is 14d and 28d.
DeleteFor the US indices the cycles are running shorter usually 9-12 trading days for the 20d cycle.
P.S yesterday I have added the trading days in the short term Hurst cycles chart:) You will see them this weekend.
In C wave corrective in gold?
ReplyDeleteLooks good ☺️
ReplyDeleteIf you look at nasdaq futures, the pattern for zig zag lower appears to have begun. We have broken the 11200 support and bounced off the 11100. Looking good trading this. I am curious what Krasi thinks about the current move in nasdaq? Appears the index is so over stretched that some decent correction is due. I have no idea where current trade will take me. I just need to ride the directions as long as possible as that is the name of the game.
ReplyDelete- Kali
Thanks everyone,
Kali
There is only zig-zags for more than a month I suspect ED - https://invst.ly/rsus2
ReplyDelete