Weekly preview

Final squeeze up to finish fifth wave, MA200 daily/MA50 weekly were hit and we saw a reversal. The daily candles are not very convincing, but I think we have an impulse and the move lower has begun.
Market breadth is showing a lot of strength and we have strong right translated cycle so we should see shot living move lower(10 days) for 40 day cycle low. With such strength I expect sequence down/up/down 6-8 weeks to digest the vertical move up.

At the moment there is a few possible patterns quick sell off b/B and 1-2/C, more complex correction like flat/expanded flat b/B, or B is finished and wave C lower begins. I am in two minds whether we have a/B or B. On one side after such strength(breadth/cycles not price) we should see continuation higher. On the other side I see so many shares with finished zig-zag and theoretically another sell off should begin - for example EEM,SOX and shares from the tech sector... even BA(last chart) heavy weight blue chip showing so much strength. Despite that I will not be surprised seeing it smashed down 30% in the next 2-3 months.

There is no point to guess. We should just wait for the market to make it's next step, then we will have more information.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I think we have impulse lower and the high should be tested with zig-zag. Then we should see some kind of down/up/down sequence for 20 week cycle low.

Intermediate term - MA200 hit and reversal, the histogram with divergence and RSI broke the trend line. Another rally higher looks unlikely. Probably the first leg lower will retrace 38% down to MA50 around 2600.

Long term - wave B running for IV from 2009. I am not sure if it is finished or there is one more leg higher.

MARKET BREADTH INDICATORS
Market Breadth Indicators - turned lower, but still buy signals and oscillators like A/D line and the McClellan Oscillator with divergences so we should see something lower, but short living.
McClellan Oscillator - double divergence and now close to the zero line.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, but in overbought territory.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - overbought level and turned lower.
Fear Indicator VIX - should move higher for a while.
Advance-Decline Issues - turned lower after divergence.


HURST CYCLES
Day 31, we should see the indexes moving lower roughly week and a half-two weeks for 40 day cycle low.

Week 7 for the 20 week cycle. Shorter 18 month cycles possible with 4 year cycle low this year, so we will keep an eye how fast the pattern develops.

Boeing - one of the strongest shares. Despite that very likely corrective pattern like many other shares. Look at RSI - ziga-zag lower and zig-zag higher. Crazy pattern nested expanded flat(wave B) in expanded flat A-B-C, but waves and Fibo measurements so far are showing text book expanded flat. What I am saying do not underestimate the probability that B is over.