Short term view - higher next week.
Intermediate term view - the correction to continue for 3-5 weeks.
We saw the price higher until Wednesday as expected, now it is more complicated.... most of the indexes have different patterns which makes me crazy:) and difficult to forecast the short term:
- Nasdaq finished wave iii of 3 and we have impulse lower followed by a-b-c (Thursday-Friday)... difficult to see some rally higher.
- XLF looks like flat b of B so next week should be higher to finish the correction(last chart).
- SP500/NYSE look more like XLF, DJ more like Nasdaq...
- Europe is strange three waves down and up but different picture - DAX with lower high/CAC with higher high/EUROSTOXX50 is testing the high....
We have short trading week and Easter. How can the big boys make more money? I think we will see pump before the long weekend(to scare shorts) and dump after the holidays(the correction taking it's course). Such scenario fits much better with cycles than the start of a sell off next week. Overall typical behavior for a correction at this stage of the pattern - long sideway move and sudden sell off(expected) for two weeks to finish the correction.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - SP500 looks better like wave b of B.... nothing lower after the plunge from Wednesday. Alternate scenario is the red one - lower on Monday, but retracing higher for the rest of the week.
Intermediate term - the index finds support at MA50, the oscillators are resetting... waiting for a few days higher.
Long term - no change, waiting for the wave from Feb.2016 to be finished.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - pointing higher, this is just shore term move the signal for a bottom should come later in a few weeks.
McClellan Oscillator - making lower high, we should see another big red trough.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - still above 70.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - continue making higher lows, it looks like it wants to explode higher.
Day 9 of the last 40 day cycle. Almost 1/4 is behind us it is obviously weaker than the previous daily cycles.
Week 11 of the last 20 week cycle. Expecting to see 18 month cycle low in the first half of May.
XLF looks like flat for b of B.... one more push higher to the trend line and MA200 will look great.