Intermediate term view - down and up for a few weeks before a bigger move lower.
Short term I was wrong this week. Obviously the move is stronger and it continued higher.
Intermediate term no change I expect shallow pullback another move higher, not sure at the moment higher or lower high, than a bigger correction lower.
I see a lot of comparison with the move in October 2015 and counting only three waves with imminent reversal. I think this is wrong, the current move is of a higher degree and I can not see three waves I see 5 waves on all indexes. I think the move higher is an impulse, market breadth have bullish behavior completely different than 10.2015, cycles we have an important low and only 5 weeks higher it is too early for reversal, TomDemark sequential for the first time in the last 18 months I see countdown/combo running with a change to be finished.
At the moment I think this the first leg higher and there will be one more after a correction.
Commodity sector - precious metals, crude oil, emerging markets EEM/EWZ with impulses higher so correction is expected soon and another leg higher.
TECHNICAL PICTURE
Short term - I am trying to see some corrective move but I see five waves higher consisting of 3 waves so it looks like diagonal to me.
The surprise will be if we see a higher high after a pullback. Than it is something much more bullish than expected.
Intermediate term - the same on the daily chart. All indicators are bullish and it will take time to reverse. That is why a pullback and test of the high.
Long term - added the bullish scenario.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - no change since last week. Overbought for a while which means strength and it is typical for bullish moves. McClellan Oscillator shows divergences and some indicators are not following.
McClellan Oscillator - divergence.
McClellan Summation Index - buy signal, nearing overbought levels.
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 - very overbought levels last seen in 2013.
Fear Indicator VIX - pushing outside the lower BB... move higher expected(lower for stocks)
Advance-Decline Issues - moving lower from overbought levels. Does not confirm the last move higher.
NYSE New Highs-New Lows - near overbought levels. This move is different than 10.2015.
Percent of Stocks above MA200 - moved above 50. This move is different than 10.2015.
HURST CYCLES
Day 25 of the 40 day cycle. After a strong move usually we have M pattern and move lower in this case to finish the 40 day cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
For the first time for a long time we have combo/countdown with a chance to be finished.
I have posted several times a monthly chart and comparison with 2000 and 2008. The correction so far takes exactly the same time and follows exactly same path up and down, but that is all with the similarities. In a bear market we see a steady move lower around 25% and weak rebound. The current move looks like trading in a range since 10.2014 with wild swing up and down. It does not look like a bear market it looks like a huge correction caused by the 9 year cycle which is working on it's bottom.
The previous 4 moves ended with retest of the high/low... I do not see why this time should be different.
EM - it looks like impulse with more to come. The same for crude oil.
Impulse for precious metals and gold miners. GDXJ one final high to finis v of 5 so careful time to take some profits.
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