Intermediate term view - choppy 2-3 weeks and higher in March.
Weak start of the week and than lower as expected. We still do not have a clear answer what is going on.
The obvious answer is wave 5 lower has begun... I am not convinced that it is so easy. My preferred scenario stays the same that we will see a choppy February with retest of the low. I do not think that we have impulse lower or that this week was the expected test of the low. So I expect more up and down. See my previous post too - when we see the forex markets reversing than we will see strong move higher.
TECHNICAL PICTURE
Short term - like previous week it is better to wait and see what happens on Monday. If the bearish scenario wave 5(red) is playing out we should see gap lower and another 30-40 points lower. If not than it is the expected choppy move up and down.
Intermediate term - the same on the daily chart. I expect the indicators to turn lower with higher low before reversing higher. This means 2-3 weeks pressure to the down side. Than what ever we see higher or lower low is a buy for a move higher for several weeks at least.
Long term - no change. After the plunge based on history I wrote to expect side way move for several weeks. This is week 3 so another 2-3 weeks and it will look like the previous corrections.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - moved higher from extreme oversold levels. I expect higher lows with divergences even if the indexes make lower low.
McClellan Oscillator - it looks like it wants to move lower.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - higher low expected.
Percent of Stocks above MA50 - higher low expected.
Fear Indicator VIX - lower high expected.
Advance-Decline Issues - in the middle of the range.
HURST CYCLES
Day 12 of the current 40 day cycle.
I think this is week 3 of a new 20 week cycle.
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