Weekly preview

Short term view - bounce and lower again.
Intermediate term view - I do not see important low, some corrective pattern is running probably triangle and it will continue until the summer... June.

We saw two days higher and some jumped on the bullish bandwagon wave 3. I have warned last week every move higher has been sold not a single day has closed at the high for the day - this week was not different green candles with upper shadows... not very convincing at all. I wrote it is corrective move and three days later we have the confirmation with overlapping.
Looking at different indexes we have the full spectrum - Europe/XBI impulse, NDX/RUT strong but only 3 waves, SPX/DJI a-b-c but weaker, XLF/EEM some crap lower low likely.... not helpful at all looking for a common pattern.

I can not see important low and broad-based strength. I do not see a sudden reversal and sell off either. What are the options after a corrective move - another sell off and lower low, diagonal(bigger one) and another zig-zag for a triangle.
Looking at the bigger picture with three corrective moves and a pattern to fit most of the indexes(I mean the direction up/down at the same time) I will pick a triangle. And to be more complicated it could be bearish or bullish(see the weekly cycle charts). In both cases I expect this sideway move to continue until the summer probably mid June, then we will see how the pattern looks like and we will know what is happening.
At the moment I like the bearish triangle more because cycles will look better and RUT supports this pattern(see the last chart).


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - so far only a zig-zag higher two legs with the same size and if you dig deeper the 10min chart both legs up look like zig-zags itself too. If I am right we will see corrective move lower and another move higher.
Do you see how MACD and RSI broke their trend lines? This is a early warning that a move is over and not to expect 4 and 5 higher.

Intermediate term - currently preferred pattern is a triangle, see the weekly cycle charts for a better perspective. Some are bullish and count this as wave D... we will see this.

Long term - the histogram is resetting higher.... it will take weeks to move above zero. Until then I do not expect continuation lower... wait until the summer if you are bearish.

MARKET BREADTH INDICATORS
Market Breadth Indicators - not very strong, but positive and pointing up.
McClellan Oscillator - at zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - 13-15 is the new area for a low, get used to this.
Advance-Decline Issues - turned lower with lower high.


HURST CYCLES
Day 14, the indexes are heading lower for a mid-cycle low of the 40 day cycle.

If you make a step back and look at the 4 year cycle(purple) with three 18 month cycles we have some room for interpretation. I was expecting sideway move and 18 month cycle low in June. Than we saw the sharp sell off and I thought the alternate count with 40 week cycle low looks better.... and since then we have sideway move, which makes both scenarios possible.
The problem with the bullish one - I fight all the time with the cycle guys that SP500 makes shorter cycles, but 4 years cycle with length less than 3 years(Feb.2016-Oct/Nov.2019) this is too short even for me.
Second the bearish one making important low in Oct/Nov and the bullish one a high around this time.... usually we see a low in this time of the year
The indicators MACD/RSI look pretty bad broke their trend lines and it is taking way too long to recover.
This hints and RUT make me lean towards the bearish scenario, I like it more.

Bearish case - we have 40 week cycle low in February the next one is very weak causing only a sideway move for a bearish triangle. The first 18 month cycle was longer than the usual length 65 weeks so the current on(at week 33) should be shorter another 25-30 weeks or a low in October/November. Wave D a low for the current 20 week cycle end of Mai, the triangle finished in June and decline begins until October/November for 18 month cycle low.

Bullish case - my initial count with 18 month cycle low in June is right and we have triangle for wave IV until the summer, then final rally and decline begins until the end of 2019.
RSI looks pretty bad it broke the trend line and stays there it takes too long to recover this is not wave 4 price behavior.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The next sell setup which was interrupted at day 6. No signs of strength. The histogram made a tower and turned lower.

RUT not easy to count... the rallys in 2017 were strange with corrective waves, the move where wave a is, is strange it is not part of the previous move up, then I though diagonal just to see the indexes continue higher with zig-zag b, followed by huge sell off. You do not see a top with zig-zag, huge sell off with impulse ok this should be a reversal... just to see a zig-zag testing the high.... real mess.
This week I thought why not 3-3-5 expanded flat for wave 4 form Feb.2016. It fits perfect explains all the mess, you have nice wave 3 with five waves and the three waves testing the high are part of ED. This is the best count for me. It needs exactly the same waves like SP500(bearish triangle) for finished pattern. At the end this will be mix from the patterns I have suggested in the last two months - RUT stronger with ED and SP500 weaker with multi month corrective pattern.