Short term view - I expect more to the upside.
Intermediate term view - after a top in January I expect a bigger correction in February.
We had a small pullback and 40 day cycle low as expected. Now waiting for the current move higher to be finished in January and the top of the 20 week cycle.
The pattern from February 2016 is not clear, it is ambiguous. Most indexes favor bullish EW pattern, but some like NYSE and Nasdaq look more bearish. All other signs are bearish and suggest something bigger to the downside - divergences on the weekly chart, market breadth indicators with double divergences, 20 week cycle top, TomDemark 9-13-9 finished on the weekly chart.
So think and act as a trader, which means follow the market step by step until we have more clear pattern. Now waiting to see first the move higher in January then the move lower in February before trying to guess the pattern.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the trend line was broken and we had the pullback lower. We saw already small impulse higher with higher high. This is enough to have a finished pattern, but it is more likely that the move continue higher. Watch the red line - if the price moves below it, with very high probability we have reversal lower.
Intermediate term - for the SP500 you can make the case for possible A-B-C(red), but if you look at other indexes bullish impulse(green) looks better (see the last chart).
Long term - most indexes favor impulse as a pattern... if this is III or V is another story.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - short term no reversal signs, but double divergences on some indicators suggesting that something bearish is around the corner.
McClellan Oscillator - making lower high.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, in overbought territory for a while.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - second high still buy signal above 75.
Fear Indicator VIX - very tight BB again and low values. Volatility will rise soon.
Advance-Decline Issues - one more push to overbought levels will look better.
It looks like we have finished 40 day cycle at day 38 and the next one is running at day 4.
Week 9 of the 20 week cycle... in the next 1-2 weeks we should see the top and the cycle should turn lower.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have finished 9-13-9 on the weekly chart. Waiting for a price flip and reversal.
DJI looks much better as an impulse. Other indexes like RUT, DAX, DJT show similar pattern.