Update

At the low in August I wrote that there is nothing so bearish because the move lower is only three waves and there is two options B wave or the last wave up to finish wave 3 on the daily chart. Until my last post two weeks ago wave B was more likely, but after initial reaction from the resistance zone we did not saw follow trough. Now it is obvious that this move is part of wave three.


I think NYSE has the most clean pattern showing five waves for wave 3 and five waves for wave v of 3.

Short term - for example NASDAQ has five waves higher, but NYSE and SPX have overlapping waves and the only way I see for a finished pattern(impulse) is two more highs. As long as the support zone holds I expect to see this two highs. On the chart is shown the NYSE index, but SP500 has the same pattern with support zone 2480-2490.

Update

This weeks and the next two weeks there will be no weekly analysis. If I have time I will post short updates.


SP500 is testing the resistance zone and the trend line as expected. Most of the indexes look more like a-b-c only Nasdaq more like 1-2-3 because the second wave higher is longer, but it could be just C=1,618xA. I think it is wave B, but we need confirmation first
This is a moment when you can not say if the price will break above resistance or reverse lower.... you can try to forecast, but you do not have a guarantee for an outcome with high probability.
With this said I think patience is better than trying to bet on bearish outcome at the moment and the time to be bullish was as I wrote about the short term bottom:). I do not see signs for imminent reversal so it is more likely to see toping for 1-2 days or continuation higher:
- if this is wave B(red) toping should start - boring Friday and most likely a top on Tuesday.
- if this is wave 3(green) in the next two trading days the price should continue moving higher above resistance and challenge the ATH. If SPX can not rally 20 points(wave 3=1,618x1=2490 the previous high) in the next two days this will be a warning sign for the bulls.

Weekly preview

Short term view - one more leg higher expected.
Intermediate term view - it is more likely that the correction is already running.

We have the short term bottom and move higher.... overall the same analysis like last week. We had one strong day and three days nothing so I think it is more likely this is wave B. As long as the price stays below resistance around 2475 it is wave B. If we see the price above it expect another higher high around 2520.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - more likely another leg higher to challenge resistance. Less likely scenarios - plunge lower from this levels and B is over or a move above resistance for a final high around 2520.

Intermediate term - I think correction is running and it will take time... most likely some combination. Now I expect one more leg higher next week and the histogram resetting above zero.

Long term - no change, expecting correction wave 4 followed by another rally higher. All indicators are pointing lower. I think RSI should at least touch the trend line before the correction is over.

MARKET BREADTH INDICATORS
Market Breadth Indicators - trying to turn higher, but no signs of strength - most likely this is wave B higher.
McClellan Oscillator - above zero cleared the oversold conditions.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal reached oversold levels.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - looks like a-b-c lower with another leg higher to follow.
Advance-Decline Issues - turned up in the middle of the range, but if you see the cumulative AD this move higher should be corrective.


HURST CYCLES
Day 4, I think the next 40 day cycle is running.

Week 1 or 8? Either we have 20 week cycle low in this case we should see higher high or we have 11+8(20 week cycle low in July) weeks and we are in the middle of the second 20 week cycle from April this fits much better wit a correction already running.