Weekly preview

Short term view - up and down, do not expect bottom next week more likely the first week of April.
Intermediate term view - heading for intermediate term low and higher in April/May.

We have the move lower, bigger than as expected, but this does not change the big picture only the alternate scenario. Even better at intermediate term low you want to see fear.
This is the missing test of the panic low from February... text book price action. I still think we have complex corrective pattern like 2000 which will take months(see the last chart). Now with the deep retracement the alternate scenario changed it is wave IV and after that V follows. The most bearish scenario the plunge continues and this is w1 of 3 looks very unlikely with this indicators and market breadth.

Many were impatient asking if the move is over after every 10 points higher or what pattern we have. You are doing it backwards focusing on the short term charts to give you the direction for the big picture. It is the opposite the longer term charts set the direction and the short term charts are only to precise your entry. Always put the price action in the context of the big picture. The daily chart was clear - lower. The squiggles on the hourly chart do not mean anything until the daily charts says it is time for reversal.(see TomDemark chart for some thoughts)


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I expect waves 4 and 5 to finish c of B.
Their is discussions about the pattern and with SPX it is easy you count the higher high in March like a-b-c B and now wave C of IV lower this is the consensus. But what do you do with DJ and NYSE which made lower high? If you count a-b-c red it is not C impulse, you have to count 1-2-3 for C and the move must continue much longer and much lower. I do not think this will gone happen. Based on this observations, the European indexes which are done with higher highs and the futures(the last chart) I still think we have corrective pattern which will last for months and not wave IV and V.

Intermediate term - the price is testing MA200 and the trend line again. It looks like the histogram and MACD are building a divergence. For a bottom wait for the histogram to finish it's trough, at the moment it is still heading lower. Alternate I am wrong and this is IV(green) with V to follow. From trading perspective not much different so I do not really care:)

Long term - the index is testing the low and MA50 and a rally should follow.... the last one for the move from Feb.2016. RSI is breaking the trend line which is a sign that this is not 4 and probably the trend from Feb.2016 is over.

MARKET BREADTH INDICATORS
Market Breadth Indicators - turned lower, some are oversold, some need a little bit lower. Watching the VIX There is no much fear. I think the message is the indexes are heading for a low with divergences.
McClellan Oscillator - slightly oversold below 60.
McClellan Summation Index - turned lower sell signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - sell signal, in the middle of the range.
Percent of Stocks above MA50 - oversold with higher low so far.
Fear Indicator VIX - turned up, expect lower high... the option players are not very scared.
Advance-Decline Issues - heading lower after lower high...it will be great to see oversold levels with higher low and divergence.


HURST CYCLES
Day 29, the 40 day cycle is heading for a cycle low probably the first week of April.

Now it counts much better as the low of the 40 week cycle so I have changed it.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 7 of a buy setup. With the plunge last two days the setup will be finished.

Not everything is waves another tools like cycles or indicators can help you discard wrong counts/patterns. In this case the histogram is helpful. After a big tower or trough expect a second one making lower high/higher low which corresponds to a test of the top/bottom. The move up continued longer making two towers, but it was not very strong so it was time for this second trough and not for a rally. That is why my answer was always it is not over despite that we had not strong impulsive action at the beginning. Turning up with the histogram a few bars slightly below zero is typical for trending market and this is not the case.(see the December low)
Now if my "histogram theory" is right we need at least 4-5 trading day the market to calm down, the histogram to make a valley and turn up before this sell off is over.

DJ futures, SPX is not different - I see only a bunch of a-b-c moves and I do not see wave C for a huge zig-zag wave IV.