Jul 14, 2016
Update - the bullish scenario
I was asked "What would trigger you to change your view?" - and my answer is: - if I see an impulse higher - the markets should rally well above 2200. - indicators/market breadth - making higher highs and clear the divergences or reset lower with market hanging around burning time with a sideway move. Current conditions two impulses higher with the same size(only zig-zag so far), market breadth at overbought levels with divergences. Now trying to look all this with bullish glasses - two scenarios the indexes continue higher so that we have an impulse(green) market breadth clears the divergences, or this zig-zag is part of a diagonal(light green) and market breadth reset lower while the markets moving sideways. A move does not end with three waves higher so the only bearish scenario at the moment is that this is wave B of ugly expanded flat correction(my last forecast). To be honest I like this diagonal scenario - it does not look so ugly like the expanded flat, cycles will look perfect, and with high probability market breadth will reset lower to levels I want to see... all conditions met. If you are bullish you do not want to see the green path this is not a healthy behavior. And the chart visually how bullish moves should look like. After 2-3 weeks the picture should be clear what is going on... exactly when I am back from holiday:) P.S.The blue lines is the area(2075-2100) where the very bullish scenario(green) is dead.