Short term view - move higher...
Intermediate term view - there is more to the upside...
The week started higher, but than three days in a row China was "playing" with it's currency which caused a lot of volatility. The short term pattern has changed, but I think the bigger picture stays unchanged.
I see a lot of bearishness, wave 3 lower impulse around the corner and talk about H&S finished.... I have looked the charts closer and in my opinion the indexes has finished stealth correction which begun in May. DJIA is more easier to show what I mean(see weekly and cycle charts) - ew pattern I see two zigzags lower with the same size, cycles one more daily cycle finished, indicators pointing to a low, market breadth pointing to a low.
Of course the low SP500 2044/DJIA ~17060 should hold if I am right and next week or two we should see a move higher. If I am wrong and wave 3 lower is just around the corner we should see only a short living pop 2-3 days... ooo wait we have it already:) than next week the indexes should start plunging lower heavily. I doubt it, but let's see what happens.
PM/Miners waiting for the market to reveal it's intentions. I think we will see one more wave higher at least miners to finish an impulse... gold not so sure.
Short term - expecting to see something higher... honestly at the moment I have no idea for the short term squiggles. The price is above MA50 and MACD is trying to break higher from the triangle so the odds are a little bit higher that we will see green Monday.
Intermediate term - the pattern has changed and I think it is an a-b-c lower part of a bigger move higher. Break below 2044 will change the picture and it will look bearish(red)
Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.
Look at the oscillators and all significant corrections since 2009(we are expecting significant one right?). The corrections do not start when the oscillators are oversold, they start from overbought levels. Looking at the indicators the message is correction is running for a long time, the oscillators are in oversold territory and it is time for a bounce. Take the worst case that a top is behind us - than I expect the scenario from 2011 deep retracement for 3-4 weeks,oscillators reseting and touching overbought levels followed by plunge lower.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - moved lower for weeks saying we are in a correction, than the indexes has bottomed and moved higher, but the indicators do not really gave a buy signal. I was confused from the "strange" behavior. Now we know why - the correction was not finished SP500 made higher low, but other indexes like NYSE, DJI, RUT made lower low this week.
I still think that market breadth points to a low and now McClellan Summation Index and Bullish Percentage have divergences and early buy signal.
McClellan Oscillator - positive despite the sell off.
McClellan Summation Index - small divergence and early buy signal.
Weekly Stochastic of the Summation Index - sell signal, but it is in the middle of the range and I think it will reverse.
Bullish Percentage - small divergence and early buy signal.
Percent of Stocks above MA50 - stayed in the middle of the range despite the sell off.
Fear Indicator VIX - nothing interesting.
Advance-Decline Issues - in the middle of the range.
Put/Call ratio - a lot of bearishness the lowest level since the corrections in 2011-2012
DJIA has a little different count - I think it has finished one more daily cycle.
I use the chart to show the H&S pattern - there is one smaller H&S pattern and many are bearish saying move lower has already begun. I think that if there is a H&S this is the bigger one shown on the chart. The head has been finished and now we should see the right shoulder.
Week 5 of the current 20/40 week cycles.
At the moment there is no reason to think that we will not see one final move higher to finish an impulse. GDXJ is at support MA50/MA200, the gap, RSI/MACD back to the trend line... only the final move higher is missing for a perfect picture:)