Weekly preview

Lower as expected, very fast and volatile move... and it looks like impulse to me. I can not see bottoming pattern and watching the charts my feeling tells me we should see something higher next week and final move lower to finish the decline which begun in September. So I still think the more likely outcome is up for wave 2/b and final sell off. Alternate options are triangle if we see MA50/MA200 tested on the daily chart or it is just bigger b/C, unlikely but let's say if I am wrong rally to around 2840 for much bigger flat.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - looking the indicators I do not think third wave or c lower running, more likely is to see something higher. If the second leg lower is already running the price should fail at MA50/MA200 on the hourly chart. If we see the price testing MA50/MA200 on the daily chart you can speculate that we have a triangle(e/B yellow) or just bigger b(red) wave. The last option much bigger flat(green labels) I think this scenario has very low probability.

Intermediate term - the same on the daily chart. The indicators suggest a-b-c higher, RSI turned lower from the upper trend line and it is testing the rising trend line, the histogram turned lower. As long as the price stays below MA50/MA200 the direction is lower. If I am wrong most likely we have a bigger flat with complex b wave(green).

Long term - no change, expecting one more low and move higher for a few months.

MARKET BREADTH INDICATORS
Market Breadth Indicators - some turned lower, there is no convincing buy/sell signals, expect divergences with the indexes making lower low for strong buy signal.
McClellan Oscillator - below zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - turned lower, nearing oversold levels.
Fear Indicator VIX - still elevated levels, but several lower highs, intermediate term low is expected in the next few weeks.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 27 possible mid cycle low.

Week 6... the picture is not 100% clear, adjustment will be needed after we see the indexes hit a bottom.

Weekly preview

We have strong move higher as expected.... but something bothers me. We have 3 up and 3 down, B wave for the SP500 retraced 90%, NDX 123% and now impulse is running.... this are textbook flat patterns. This could be 1/C, but it is very long or it cold be the whole wave C. Pullback for 2-3 days and rally to 2900 for wave 3/C does not fit much, I see some shares which need one more leg lower. The second option makes more sense to me. What I am saying it is very likely that we have a flat correction in November and another sell off to follow in December to test the January/April lows around 2550.
We have to watch very closely how the move lower develops after the current impulse is finished. I will definitely close my longs, I do not want to be caught riding a sell off.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - this final fifth wave made only half a point lower low and I thought we will see another 20-25 points lower on Monday to trap the last bears, but the indexes just gaped and continued higher. The move up is an impulse and still has a day or two to finish the fifth wave.
Red is the flat pattern and another sell off. We will watch the pullback if it is a zig-zag or impulse.

Intermediate term - the final wave of the impulse will hit resistance - MA50/MA200. The pattern looks more like retest of the broken MAs and such retests seldom have bullish outcome. RSI trapped between the two trend lines soon it will pick a direction and confirm what is going on.

Long term - one more sell off will test important support - the January/April lows and the middle trend line. We can only wait a week or two to see if my suspicion will be confirmed.

MARKET BREADTH INDICATORS
Market Breadth Indicators - turned up and look positive, most of them in the middle of their ranges.
McClellan Oscillator - above 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 - lower highs, but elevated levels.
Advance-Decline Issues - turned up in the middle of the range.


HURST CYCLES
Day 23 of the 40 day cycle. It does not look bullish - very deep retracement in the middle instead of steady move up for right translated cycle.

Week 5 of the 20 week cycle.