Short term view - move lower, in wave "a" of the correction
Intermediate term view - correction for 6-8 weeks.
We saw a move higher as expected.... no strong case either for bullish or bearish outcome, but I see more and more hints that the top is behind us. Europe looks like finished ED with reversal candle and RSI/MACD divergence, DJT with clear impulse lower, XLF you could count diagonal lower, RUT you can count an impulse lower. SPX on the daily chart RSI broke below the trend line and it is not recovering quickly just tested twice the broken trend line. It takes too long for the index to rally 7 trading days already. McClellan Oscillator - compared historically after a move below -80 the correction was already running, but it is so shallow that you do not think about correction. "Recovery" follows for 1-2 weeks but it is weak and reversal follows - for more than 2 weeks we have exactly the same price behavior.
Higher high could not be ruled out, but I think the top is behind us.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the price bounced from the support level as expected now waiting for the market to show it's intension. It looks to me that the trend line was broken and tested. The bearish outcome looks more likely.
Intermediate term - RSI shows bearish behavior. It broke below the trend line and it is not recovering, it is just testing the trend line....
Long term - no change, waiting for the wave from Feb.2016 to be finished. The indicators turned lower, waiting to see when the price will follow them.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - are pointing lower... we should see something lower for the indexes even if it is only a few percent.
McClellan Oscillator - recovered above the zero line.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned lower, but still above 70.
Percent of Stocks above MA50 - turned lower but still at higher levels.
Fear Indicator VIX - several higher lows, waiting to explode higher.
Advance-Decline Issues - in the middle of the range.
Day 32 of the 40 day cycle. We are in the last quarter of the cycle... it is difficult to see a rally, only if the count is wrong.
Week 8 of the last 20 week cycle. The middle of the cycle, waiting for a turn lower and 18 month cycle low in late April.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
No price flip for a sell signal so far. The histogram looks bearish - second top and below the MA.