Jul 16, 2017

Long term - update

I am very busy in the last few months so a quick long term update with some delay.

From the last update the main ideas were - stocks are in bull market higher, moves in the opposite direction(higher) for PM/Bonds, corrective move lower for Crude/Natgas... only the USD did not follow the plan exactly:)

The current view for the next 6 months:
- Stocks - correction wave 4 and higher
- Bonds - as I wrote last time we saw the major top for the bond bull market. We have now an impulse lower and corrective move higher.
- USD - major top 16 year cycle high behind us. The first wave lower is running in next 1-2 months it should be over and higher for a few months.
- Precious metals/miners - the cycle model points to an important low in Q4 this year.
- Crude Oil - correcting in wave B lower as expected. It should be finished in a few months and wave C higher should follow.

The important event - I think at the end of this year we will see a switch in the long term trends from stocks into commodities. If I am right Crude/PM should make an important low in Q4 2017 a few months ahead of the Stocks which should make an important top in 2018.


- STOCKS
The bull market is not over. According to EW/cycles/market breadth we need at least one more high, so I expect a correction for wave 4 and higher again.




- BONDS
We have now the impulse lower and corrective wave is running. In the next few weeks we should see a 20 week cycle low(stock making the top of their wave 3) and retracement higher(stocks lower for wave 4) After that bonds should move lower again.... corrective waves up and down.



- FOREX
Most of the time I was tracking a triangle... the waves d and e were not so clear and I thought we have an impulse with missing wave 4 and 5. At the end this was wrong and I think we saw a triangle... well hidden, but a triangle.

Long term view cycle top-to-top analysis - the move lower lasts too long and it is too deep so I think we have a major top 16 year cycle top behind us.

Cycles bottom-to-bottom analysis - this are not Hurst cycles, but the USD is showing very consistent 3 year cycle. If it continue to work it is close to 3 year cycle low and we should see at least a few months higher. Another interesting observation is that the USD is moving 7 year lower and 9 years higher

Here is how I see the pattern and the hidden triangle:) Next the wave lower should finish in a few weeks and retracement for several months.

USDJPY - from EW perspective the move lower looks corrective, the move higher looks corrective already week 13... I think it is an a-b-c. If we add cycles several weeks lower to finish the 1 year cycle will look better after that higher to finish the move which begun in 2016.



- GOLD/SILVER/MINERS
We saw a move higher after double zig-zag lower as expected... and since then it is a mess. Gold/Silver/GDX/GDXJ with different patterns which does not make it easy to pick the right one. My preferred scenario is an important low around the end of the year(probably October-November) like every year before a strong rally. I think this will fit better with seasonality/cycles and correlation with other markets.
The alternate scenario is bullish we saw the low with the Silver spike lower and the PM sector should start rallying NOW. I guess we will know in the next few weeks what is going on.
If you are trading the PM sector a trading plan could be to open small position and if it breaks out higher to add more and if the move is weak to get rid of it with small profit.

Gold hit resistance again, the second 40 week cycle hanging somewhere in the middle(move lower will look better) and with the USD at 3 year cycle.... that is why my preferred scenario is lower. If I am wrong gold should start rallying now and bust trough MA50/the trend line/resistance making higher high above 1300.

Silver adds more to the confusion. With this spike we have move lower from the 2016 top which looks like A-B-C and with 82 weeks we have the minimum for 18 month cycle low....

GDXJ looks bearish - from the low we have 10 weeks "higher" I really struggle to see impulsive bullish price action.... but it is a choppy mess. One more zig-zag lower for C to make a two year cycle low will look much better.

GDX looks bullish and adds more to the confusion:) the move lower from the Feb.2017 top looks like a triangle and imminent rally.... to see it as a bearish pattern this should be some very complex wave b and one more leg lower fo finish c of C(red).



- CRUDE OIL/NATGAS
I was waiting to see a top for wave A and corrective wave B lower. I think this forecast works fine so no need to change it.

Trough-to-trough cycle analysis - we should see a low in a few months.

One more 24 week cycle for important 2 year cycle low and the low of wave B expected.

Natgas did not disappoint - after an important cycle high we saw sharp decline. Currently the pattern is not very clear. I think we have a corrective move lower which is not over. I expect a move higher after 20 week cycle low and continuation lower.

4 comments:

  1. Hello Krasi, I came across your blog only recenty through google chart images w/ TD stuff and noticed you havent posted much recently, have you found MACD/RSI just as reliable when included with Elliott Wave/traditional TA/Cycle work? Appreciate the insight you've shared. I'm still reading though the blog so my apologies if you've already commented on this q.

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    1. Yes, the posts are old I do not have the time to update them or post something new.
      MACD/RSI are more reliable if you combine them with EW for example.
      When you combine different tools you have different pieces of information and you crosscheck the signals. Usually the result is better compared to using only one of the tools.
      My point of view is that if you combine several tools(even only basics) you will have better results instead of deep dive in EW,cycles etc.

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  2. looks like you did it again! Pullback started literally 2 point away from the 2480!! Nice work.

    Now, do you still feel this pullback is part of wave 1 of 5? or is it the A wave?

    Thanks,

    Kali

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    Replies
    1. Too many ending patterns across different indexes. This should be wave 5 then we will see what comes.

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