Intermediate term view - a new high before the correction starts
The overlapping moves were something corrective and the indexes took the path lower as expected. Great, but I do not like the move lower.... I think the indexes will try to make another higher high.
The charts, weekly and monthly, look bearish.... but when I see possible a-b-c around day 40(40 day cycle low), the DAX made a-b-c for minor wave 4 and we have five wave impulse of the lows probably i of 5, market breadth not really supportive... my feeling tells me the move lower is just part of a bigger pattern probably 4 of the ED.
If the correction is running we should be in the stage where the indexes should not move higher for a long time and we should see only shallow pullbacks higher. So the price should stay below resistance and 61,8% Fibo around 2085.
We will see a correction eventually, but I am afraid we saw another week which does not give us clear picture and we must keep an eye on both scenarios. If my feelings is right:) probably two weeks to the upside before the correction starts.
Trading is much more simple - if you are short as I have suggested, you can put a stop at break even and just watch the game:) If the indexes move lower great and if they do not... short term traders find a low for a long trade the others wait for a new high.
TECHNICAL PICTURE
Short term - as long as the price stays below 2085 there is a chance that the correction has started. We will watch closely what the price is doing... so far the move looks corrective and probably will test the lows.
Intermediate term - I am afraid we still have to watch both scenarios.... do not forget PATIENCE is very very important if you want to be a successful trader.
Long term - no change for the long term.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - does not really show strength for the move lower.... this could change, but at the moment I do not see nothing which should make me bearish.
McClellan Oscillator - higher low... divergence even if SP500 make a new low.
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal but reached oversold level where a swing usually bottoms.
Bullish Percentage - sell signal but above 70...
Percent of Stocks above MA50 - in the middle of the range around 50.
Fear Indicator VIX - nothing interesting for the short term... long term series of higher lows.
Advance-Decline Issues - nothing interesting, up and down around the zero line.
HURST CYCLES
We are around 40 day cycle low... waiting to see if one more low is in the cards to place it at the low.
Week 8... I am waiting to see how the low of this cycle will look like. It is possible that it is of a lower degree.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Nothing really interesting on the daily and weekly chart..... at 4 of a setup.
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