Short term view - the indexes should reverse next week.
Intermediate term view - this is just the first leg from a bigger move higher.
I posted this week two updates showing my idea for wave X and mentioned the alternate scenarios bearish and bullish.
We had the spike higher to finish 5 wave pattern from 24.02 and price hit MA200 on the daily charts. Now waiting to see if the price will reverse next week.
Short term the signs are for a pullback - market breadth at overbought levels for a while,resistance reached, MA200 hit, finished 5 wave pattern, 61,8% Fibo retracement(from ATH to the low). And as a note the risk USD/JPY pair did not follow the markets higher and move lower is expected.
Intermediate term - price, indicators, market breadth, cycles all have bullish behavior. I mean the signs are not for a single corrective leg which is finishing. For example McClellan Oscillator staying overbought for a long time, Percent of Stocks above MA50 hit 90% short term it is a red flag for a pullback, but intermediate term means strength to expect more to the upside.
So the signs are for a pullback and than continuation higher.
Short term - the path for X wave is shown. We do not have a reversal sign, but if you dig deeper on the 10min chart the spike higher finished 5 waves, hit resistance and MA200(daily), MACD/RSI divergence - the signs are for a reversal on Monday.
Intermediate term - All three scenarios are shown. At the moment I do not see evidence for the bearish(red) scenario. I think it is X(yellow) or 5(green). Now waiting for a pullback to see how it will look like.
Long term - no change. The indicators look bullish and I do not see a sudden reversal on the horizon.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - overbought for a while which means strength and it is typical for bullish moves. In a bear market a rally hits overbought level and reverses no hanging at overbought levels.
McClellan Oscillator - hit extremes, overbought for a few weeks now we have divergences.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, but at overbought territory. It is time for the next swing in the opposite direction.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - buy signal, hit very overbought level almost 90%.
Fear Indicator VIX - higher low short term divergence.
Advance-Decline Issues - topping at overbought levels and short term divergence.
Long term cycles - there is different scenarios and a lot of discussions. For me the low from February is important low from a higher degree either 40 week or 18 cycle low.
DJIA is the only index which made higher low and I will count the move at day 20 to be in sync with the other indexes. We should see a pullback lower to finish the first 20 day cycle from the 40 day cycle
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup finished, the price still moves higher and no price flip at the moment. This is a sign for a strength for me.