Short term view - more likely lower, the indexes are not finished to the downside.
Intermediate term view - we have correction for two months which is not finished it will last a few more weeks.
We have the spike lower. It is not a surprise, I wrote for two weeks about the bearish price action around MA50.It is typical price behavior.
Than in the comments I was speculating about short term bottom in a day or two. Why? Because the whole structure from the top looks corrective. Now we have the move higher and "surprise" it is another a-b-c which hit resistance around 2145 and MA50 on the hourly chart.
Short term forecasts look ok... which does not help us with the big picture. We have more and more corrective waves and more combinations....
What we know - we have a move lower for two months already, which looks corrective. I do not see an impulse lower to suggest acceleration lower. I do not see fear and finished pattern to suggest that a low is in place. Market breadth is correcting and the indexes should be heading for a bottom, but not quite there yet. It could last a few weeks before a bottom.
Most likely the correction will continue for a few weeks.... the pattern I am not sure what pattern we have.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - move lower and corrective reversal so far which hit resistance. If we see a continuation higher a move with the same size will hit the trend line and the pattern will look like triangle(yellow)- If we see continuation lower the whole pattern will look like huge zig-zag A-B-C (red).... now just waiting.
Intermediate term - waiting to see what pattern we have and to pinpoint the 40 week cycle low. The indexes should "attack" the ATH one more time before a move lower for a few months.
Long term - no change.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - are showing mature correction, but no signs of a bottom. It could last a few weeks before we see reversal.
McClellan Oscillator - spending the last two months below zero. We have two troughs already with divergence.. I think we will see one more trough before a bottom.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, in oversold territory for a while
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - close to oversold level one final spike below it will look great.
Fear Indicator VIX - some fear and level like 20 will be good for a low. I think it has started building divergences for an intermediate term top.
Advance-Decline Issues - nearing the oversold level.
Not very clear like EW, there is room for interpretation... so just waiting.
Russell2000 and Nasdaq look different. It is possible to count an impulse for a flat correction. The chart is from Thurday and we have a move higher for 4 so it works so far. You want to see MACD and RSI close to the trend lines and than making higher low when the indexes are making lower low.