Short term view - move lower expected.
Intermediate term view - lower for 2-3 weeks than higher again for 2-3 weeks.
More of the same 5 weeks sideway move, but the indexes continue working on their pattern. Nothing new just the charts updated.
We saw one final wave higher as expected and the pattern looks now finished. We saw topping around FOMC 17.08 and second top full moon 18.08. We have leg lower and pop-up after the news as expected.... only one big red candle is missing. If the indexes start moving higher again - no clue... maybe iii of 5.
Yes move lower is expected, but do not get too bearish. The 40 day cycle is bullish right translated and it has entered the time window for a low. So any move lower should be short living... it can be sharp, but should not last more than 10 trading days and the size the usual 3%-4%. Even if I am wrong we need topping process and we should see second top for some kind of a double top/M pattern.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the pattern looks finished I expected to see a move lower.
Intermediate term - nothing new divergences and move lower expected, but I do not think that this is a major top.
Long term - nothing new, I think the indicators need time to reset before the next big move higher.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the same like last week the indicators look bearish and correction is running already according to market breadth.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - second top with divergence.
Percent of Stocks above MA50 - second top with divergence.
Fear Indicator VIX - very tight BB the volatility should shoot up in the next weeks.
Advance-Decline Issues - weakness and divergence.
NYSE New Highs-New Lows - diverging less stocks are making higher highs.
Percent of Stocks above MA200 - entering bullish mode close to 80.
Day 38 of the 40 day cycle. We are in the time window for a bottom so any move lower should be short living and in worst case the top will be tested.
Week 8 of the second 20 week cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have combo finished and countdown at 11. No price flip so far.