Weekly preview

Short term view - higher I think.
Intermediate term view - the indexes are close to intermediate term top.

Volatile week sharp sell off to the support level and bounce higher... at the end more sideway price action.

To sum up all scenarios:
- the bullish case - wave 3 running. I do not see how this mess is a third wave. I do not see neither indicators nor market breadth nor cycles or something else to support this idea.
- the less bullish case diagonal or wave E triangle. From trading perspective they are the same - deep retracement, higher low and strong rally.
- the bearish case - 1-2 i-ii lower. I do not believe it and indexes like RUT/NDX do not support it.
- the less bearish scenario - much bigger corrective pattern is running. I have already mentioned it a few times.
All I see is corrective price action in the last two months, strength is missing. The scenarios which are probable for me are the the less bearish/bullish pattern shown on the daily chart. Maybe RUT looks strong, but if you see NYSE/XLF there is no strength only weakness... even the triangle looks too bullish.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - support tested and a bounce.... only a-b-c so far. Around 2755 wave c=a so probably a few more days higher. Unless we see strong rally above 2760 the pattern is diagonal or D from a triangle and the next move is 100+ points lower.

Intermediate term - just waiting to see which one will play out. If we have a diagonal or triangle(green) MA200 will be tested one more time and finally strong rally begins. Or we have bigger corrective pattern(red) and wave X is running followed by another zig-zag lower.

Long term - nothing new the sideway price action continues which is not bullish. From 9 weeks "rally" we have 5 green and 4 red weeks. For DJI it is 4 green weeks and 5 red weeks and for NYSE 3 green and 6 red weeks. That is why RSI is just flat and testing the broken trend line. That is why the histogram is already close to zero and the price is doing noting. That is why the angle of ascend is small. I do not know how to call this bullish... after 2 months I would call this bearish.
Unless we see 100 points higher in the next 1-2 weeks it is what it is - crap.

MARKET BREADTH INDICATORS
Market Breadth Indicators - are weak, looking at the VIX, Advance-Decline Issues and McClellan Oscillator I see intermediate term top even if we see higher high. I do not see conditions for strong rally wave 3.
McClellan Oscillator - series of lower highs.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal in overbought territory.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range .
Fear Indicator VIX - do not expect levels 9-10, I think the VIX is making a low and the indexes a high.
Advance-Decline Issues - series of lower highs.


HURST CYCLES
Day 40+3... 40 day cycle low is possible.

This is the chart with cycles counting top-to-top/bottom-to-bottom(not Hurst cycles), which I have shown once.
We have now 4 consecutive weeks closing above MA10 which means the top-to-top cycle is now rising heading for the next 20 week cycle top. The problem with the bullish case is that the cycle spent most of the time moving lower and it is already 18 weeks old, which is weak cycle. The behavior matches corrective move and not the beginning of a rally(wave 3 rally another 1-2 weeks higher to finish corrective pattern is ok) .

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Week 7 of a sell setup. Maybe it will be finished with a diagonal/triangle... or negated. Both cases are not very bullish