Weekly preview

Deja vu another vaccine pop and pullback. What changed is that this pullback is taking too long, which pushes the top later in time. The implications are for the cycle count - the high-to-high cycles are much shorter, such long 40w cycle high is not very likely.

I expect the pullback to continue next week. I think the indices are heading lower into 5w low followed by 20w high first half of December. The alternate scenario is the top is in.... this will be very strange - roughly 5 days up and 10 days reversal which reversed nothing so far.


TRADING
Trading cycle - technically switched to sell signal with another cross. I would say just weaker move up.
The high-to-high is getting too long again, low-to-low says we are close to a low. Both high and low expected - complete nonsense. We have to look at the other tools. I would say look at the new cycle model for the right answer.

TECHNICAL PICTURE and ELLIOTT WAVES
Short term - still in the b wave. I think we will see more before it is complete.

Intermediate term - nothing new. The indicators with divergences warning for a high. The pattern which fits best is symmetrical completing at 18m high.
What will be the difference between "this is the top" and the pattern is not completed even if lower high follows? - The speed of the decline. In the case of a top the decline will be fast. In the case of wave h(red) it can retrace a lot like all the way down to 3000, but it will move slowly like 2 months.

For those interested in Neowaves:
In a NEoWave Diametric, the time and complexity exhibited by each wave will be very similar, but they remain different in price. This creates the contracting and expanding shape.
In a NEoWave Symmetrical, most waves possess the same time, price coverage and complexity. So far we have 4 surges higher with the same complexity, size and time. The only exception is wave e which is longer in time. I suppose that is why Neely switched to symmetrical, because it describes better the price action.

Long term - 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 most likely triangle. Look at NDX we have corrective wave which is 1,618 bigger than the previous one which could be only b of a triangle. I think the best looking pattern is Neely's triangle. The indices are close to price high and turn lower. The indicators are pointing to topping not continuation. The weekly candles telling the same no continuation after the big green candle.

MARKET BREADTH INDICATORS
Market Breadth Indicators - pulling back from overbought levels. I would say preparing for short term divergences and we have already long term divergences.
McClellan Oscillator - lower from the top.
McClellan Summation Index - buy signal with long term divergence.
Weekly Stochastic of the Summation Index - buy signal with multiple divergences.
Bullish Percentage - lower from the high.
Percent of Stocks above MA50 - lower from the high.
Fear Indicator VIX - doing nothing.
Advance-Decline Issues - lower from the high.


HURST CYCLES
Short term cycles - adjusted to the new long term count lets see if it will play out next week.
With this model we should see the decline continuing next week for 5w low followed by move higher for 5w/10w/20w high.

Why suggesting a new cycle model - because this 40w cycle high is getting too long. From the top in 2000 the 54m cycle(highs) is running roughly one year shorter 3,5 instead of 4,5 years. The 40w cycle is roughly 7 months long instead of 9 months.... and now should be 10 months long?!?!? - I doubt it. On top of this the down part(40w low) was 2-3 months shorter than the usual, I would expect shorter cycle not extended one. Why the important high B wave and low C wave should be at 40w high/low followed by 18m high/low in the middle of nowhere it does not make much sense.

It is the same pattern and shape, the difference is the summation of three cycles causing this shape are not 10w/20w/40w but 20w/40w/80w. The key difference and confirmation - the initial decline will take longer like two months. Now waiting and watching what happens in the coming weeks.
All that this count has and the previous one has not:
- the sequence 20w/40w high -> 20w/40w low runs smoothly as it should be.
- the 40w high-to-high is running shorter as it should be.
- the important highs/lows are at 18m highs/lows at pattern highs/lows as it should be.