Short term view - more to the upside.
Intermediate term view - higher for 2-3 weeks then correction for 2 months.
This reversals surprised me.... but I do not think someone can predict them. I have not posted update because I was not sure about the pattern... second there is indexes with unfinished pattern(see the last chart) and I was not convinced that this is an important reversal.
Currently I think we have stealth 20 week cycle low and the last wave up is running for 2-3 weeks before a bigger correction for 2 months. The indicators are turning up, market breadth is bearish but no problems for one final move for a few weeks,TomDemark sequential still with buy signal... so overall green light only waiting for confirmation.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - this is the best I can come up with:) As long as the price does not move below the support area and finds support around MA200 the bulls are ok. DJ looks different so the pattern could be different... the indexes could just continue higher with simple pattern 1-2-3 running at the moment. As I said I am not 100% sure for the short term pattern.
Intermediate term - the indicators are turning up one final move up and divergences expected. I think that somewhere in this mess from the last two months there is wave 4 and 20 week cycle low(or it will come with the low for wave ii of the ED above).
Long term - no change, waiting for the wave from Feb.2016 to be finished.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the big picture is bearish with divergences, but short term no strong sell signal another 1-2 weeks higher for the indexes is not a problem.
McClellan Oscillator - making lower highs, but still positive.
McClellan Summation Index - no sell signal.
Weekly Stochastic of the Summation Index - turned lower, sell signal.
Bullish Percentage - sell signal, but still above 70, expecting lower high below 74.
Percent of Stocks above MA50 - move lower to the middle of the range and turned up, expecting a divergence.
Fear Indicator VIX - a lot of complacency and very tight BB. Volatility will rise sharply soon.
Advance-Decline Issues - one final run to the overbought area will look great.
The previous two 20 week cycles were longer than the average, which usually means to expect shorter cycles after that. Looking back when we see longer 40 week cycle (37-38 weeks) the following one is shorter 25-30 weeks so I am expecting cycles with 11-15 weeks length. If the indexes just continue higher the 20 week cycle is behind us at week 11. If we see the ED playing out, the low will be next week with length 14. I will leave the counts below as they are and adjust them later if necessary. It is not so important to pinpoint the low just keep in mind that we have stealth 20 week cycle low and the next high will be the high of the 18 month cycle.
Day 23 of the 40 day cycle.
Week 13 of the 20 week cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Still no price flip(sell signal) on the weekly chart.
RUT - we have very choppy overlapping mess for almost two months. I do not see a way to twist this and say it is bearish we have a top and impulsive reversal. It is a classical "bull flag" and if I try to count the EW I would say this is iv of 3.