Weekly preview

The market never makes it easy - we saw w4 as long sideways move and w5 as expected to complete a pattern and then big decline, which is not an impulse so far.

From EW perspective - either the decline continues or if it is completed as a zig-zag than it should be w4 from a bigger impulse or another X wave.
Simple TA perspective - look at RSI and MA50 the price does not crash with this setup(strong RSI and well above MA50). If you compare the indicators with Jan-Feb we saw the January high and declne so we should see a second high... higher or lower high is another story.
The trading cycle - we have strong right translated cycle and the high should be tested... lower or higher high what ever.

My conclusion - patience, let the pattern play out and for trading we will have our low risk setup later with a second high. With that said do not get fooled this move from March is completing, the time to take profits is already running. It has begun with the blow off on Wednesday and it will contine with this second high.
To clarify the move lower I expect should be long and corrective nothing to do with the March decline. The EW theory says the waves alternate in time and complexity so do not expect the same outcome.


TRADING
Trading cycle - we have clear sell signal with huge red bar closing below MA10 and RSI clear break lower. Now it is waiting for the current cycle to make a low and for the next one to make a high. The next cycle should be weak and left translated.

TECHNICAL PICTURE and ELLIOTT WAVES
Short term - my primary scenario is completed w-x-y(red). For confirmation we need impulse lower, which we do not have for the moment.
Until then alternate patterns are possible like w4 of a bigger impulse C(white) or another X wave.

Intermediate term - clear MACD divergence, RSI broke the trend line so best case one more high with divergence. On the other side RSI moving too fast too vertical close to 50 already so worst case test of the high to establish new down sloping trend line. Look at how in January MA50 was tested -> bounce -> divergence and then lower. We should see something simmilar with ot without higher high.
I am sticking to my primary count W-X-Y. I do not like how this supposed waves X or 4(which is lower degree subwave) are braking the base channel - this is no go.

Long term - I think the bull market completed in 2018. Since then a bunch of corrective waves. Currently I think this rally should be a corrective wave of a bigger pattern flat/triangle or x wave. With corrective waves often you have to adjust so stay open minded.
The odds are shifting into favor of Neely's pattern - triangle. For NDX this leg is bigger than 161% compared to the previous one so X or b flat is not working, what left is b wave of a triangle.... and I do not think SP500 and NDX have different patterns.

MARKET BREADTH INDICATORS
Market Breadth Indicators - weak pointing lower with divergences for a very long time so nothing new.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal and divergence.
Weekly Stochastic of the Summation Index - sell signal and divergence.
Bullish Percentage - sell signal with divergences.
Percent of Stocks above MA50 - turned lower below 75 with divergence.
Fear Indicator VIX - spike higher, cool off should follow and higher again.
Advance-Decline Issues - broke the trend line connecting the lows and now testing it, the next move up will be the top or we already saw it.


HURST CYCLES
Short term cycles - it looks like we are close to the next 20d low. The two posible 20w lows accordingly this should be 5w or 10w low.

Week 6 or 10 for the 20w cycle. For now I follow both counts and watch the further price action. We are close to 40w cycle high or we saw it this week.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Setup completed on the weekly chart price flip is close below 3372.