Short term view - waiting for the final waves iv and v higher and the move to be finished.
Intermediate term view - when it is finished the high should be an intermediate term top followed by a correction for 2 months.
We have the small pop higher to finish wave iii now wave iv is running. Nothing new, the analysis stays the same. Waiting for the current move higher to be finished and the top should be an 18 month cycle high followed by a correction for 6-8 weeks.
On the daily chart I have changed the red count. To be honest now with the strong leg higher the move since Feb.2016 counts better as two zig-zags compared to bullish 1-2 1-2... I will just wait and see what happens in March and April.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - wave iv should be shallow sideward move 20-25 points. If we saw the top for wave iii the measurements for wave v are roughly 45 and 70 points.
Intermediate term - changed the diagonal count(red), SP500 moved too high. It still counts very well as two a-b-c waves higher, but you need to change the place of w1 and w2(red). There is two support areas - in the bullish case w4(green) should move to the area of the previous wave iv, in the bearish case w4(red) should overlap with w1(red).
Long term - no change, waiting for the wave from Feb.2016 to be finished.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - many indicators did not move higher despite the strong move, they ignored it - a red flag. The big picture is bearish with divergences, now waiting for the indicators to turn lower and sell signal.
McClellan Oscillator - lower again, making lower highs.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - around the overbought level, again lower high.
Fear Indicator VIX - more and more tight BB, the question is not if, but when it will explode higher.
Advance-Decline Issues - it just refuses to move higher despite the strong leg up.
Day 17 of the 40 day cycle. Expect mid-cycle low(the small numbers on the chart) on day 18-19 with the low for wave iv.
Week 5 of the last 20 week cycle..... waiting for the 18 month cycle high.
Some readers are bearish and other just irritated by the never ending bull market.... so here is what I think.
Such strong final phase is typical for the end of a bull market. If I compare the previous tops 2000/2007 with now and look at EW counts/cycles/market breadth they suggest the same scenario. I expect the same topping pattern with three tops before significant sell off - top with strength(now), one more higher high with weakness, test of the high(lower high). I think it is too early to be very bearish and make big bets on the short side. There is no point waiting 6 months or longer for the big short.
Currently the indexes are where the green arrow is. We should see 6-8 weeks correction for the 18 month cycle low. Higher high for a finished pattern. First move lower to the MA20 followed by test of the high and then the sell off should begin. Do not expect a plunge before seeing the price below MA20 - see the red arrows.