Weekly review

Short term view - probably consolidation early next week before more on the upside
Intermediate term view - intermediate term bottom on June 4-th and higher prices till early August.

Wow what a crazy week.... great fake move:) All signals were in line - triple divergence on the histogram and heading lower bellow the zero line, candle formation saying lower prices, cycles pointing to 20 day and 40 day low, 13 on DeMark's count, broken wedge and support level, the market breadth indicators issued sell signal... and the result can be seen on the charts:)
I switched in short mode, that is what the market was saying - bearish signals and moving fast lower to the last important low ~1325. Than it took to much time to break it and I was smelling that something is wrong. On Thursday SP500 opened higher again and I switched back to long mode. That is very import - a trader should not stick to some bearish or bullish calls, a trader should follow the market and switch bull<->bear in a matter of seconds. Overall I made more money than expected (because of the strong moves down and up) so you should not hate the market that it does not react as you expect, just follow it:)

After all crazy moves the call for higher prices in the first half of August stays the same. After the low from Wednesday the wedge has muted to a channel. In Elliot waves terms this is W-X-Y move. My interpretation(I have changed it a little bit) is that we have 3 waves for W, 5 waves for an ugly connecting wave X and now another 3 waves should finish Y from a double zig-zag. W is ~97 points long another 97 points for Y is exactly at the upper channel line and the highs from March around ~1425.

TECHNICAL PICTURE
Short term - after this two strong days probably there will be a consolidation before moving to the upper channel line. The first wave of W was 60 points now we have 60 points too, two huge bars resistance from a trend line through the last several peaks so it looks logical to see a healthy pullback.

Intermediate term - there is no bearish signs so the move should continue higher. The histogram on the weekly and the daily chart is moving higher, two strong days with huge candles, SP500 found support at the last significant low and EMA50... no troubles for the bulls at the moment.

MARKET BREADTH INDICATORS
Market Breadth Indicators are mixed the most are still in buy mode but showing weakness and the McClellan Summation Index waving the red flag that despite the strong two day rally the internals are weak. My interpretation is that we will have some move on the upside but this is not the beginning of a new long term move and a strong rally rather the end of the swing which began in June.

McClellan Oscillator - not impressed at all by the rally. The high for now is even lower then the one from the last week. In any case we will see a divergence.
McClellan Summation Index - issued a sell signal. Probably we will see a divergence.
Weekly Stochastic of the Summation Index - issued a sell signal. This is an early warning that the swing from the June low is nearing its end.
Bullish Percentage - still on buy, but very weak.
Percent of Stocks above MA50 - touched the 75 level. Intermediate term correction usually touch this level and reverse. Probably we will not see it much higher.
Fear Indicator VXO - not so impressed by the rally. I think its building a base before moving higher.


CYCLES (TD - trading days)
The 20 day and 40 day cycles made their lows as expected and the next 20 day cycle has started with explosion. Currently are 3 days and I expect at least another week moving higher.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
On the daily chart after finishing countdown 13 we saw strong move lower but now we have higher high. I think we will see TD Sequential Reinforcement 9-13-9 before this move is over.
The weekly chart is interesting SP500 is now at 7 from a sell setup and I think we will finish it which is in line with my expectations for a intermediate term top in the first half of August.
T-theory - I have posted the chart after the bottom in June and I think the call for a move higher till mid August will be right.

Short term update

Wow great fake move on the downside.... very deep retracement to the last important low ~1325-1330. Back to the initial plan from the weekend. The wedge mutated to a channel and the ugly correction to an uglier one:) I think it is a triple zig-zag W-X-Y-X-Z.

Short term update

SP500 is in a support zone. It should break bellow it today or tomorrow.
If it fails and moves above the last minor high ~1355 the direction will be again up and the ugly W-X-Y will become uglier W-X-Y-X-Z

Short term update

There was some hope for the bulls yesterday after the strong rebound.... but now I think we will see lower prices.
Current thoughts

Weekly review

Short term view - 1-2 days more weakness after that continue moving higher
Intermediate term view - intermediate term bottom on June 4-th and higher prices till early August.

No surprises this week. I said we have resistance zone between 1365 and 1375 we will go up than a pullback will follow. SP500 touched 1380 and a pullback has began. I was wrong for 5 points third week in a row:) but pretty close again.

The first chart shows what I was using for a guidance the last 3 weeks. In terms of Elliot waves W-X-Y correction - W=95 points, X running flat, Y=W=95 points touching the upper channel line around ~1410. We saw A from Y 55 points, now we are in B of Y which should put a low around the 50% retracement from A which is ~1355, than C should follow to finish the Y wave C=A=55 or ~1410.
This count worked great for the past several weeks, but now there is one big BUT.... on Friday SP500 and the other index put very ugly candle, we have triple divergence on the histogram(which turned lower) and now a divergence on the MACD. So there is very high probability that the top is in and we have double top in play.

How to trade this fifty-fifty situation? If the SP500 will gone move higher we should see max another 1-2 days of weakness, no huge red bars and more up and down intraday, low for B of Y between 1350-1355. If you see weakness lasting longer, intraday moving only in one direction - down, breaking the 1345 level than we have a double top.
The line in the sand is 1345. If SP500 close bellow this level the damage will be done - we will have a low lower than the last minor low(see A of Y on the first chart), trend line broken and support level broken(see the second chart).

TECHNICAL PICTURE
Short term - if the count continue working we should see pullback to 1350-1355 before moving higher.

Intermediate term - now we have some very bearish signs - very ugly candle formation, triple divergence on the histogram which turned lower and a divergence on the MACD. So far the count was perfect so I will stay with it until proven wrong. That is way move higher is the preferred option. BUT again the line in the sand is 1345(where the red line on the chart starts) below this level there will be too many technical damages - trend line and support broken.

MARKET BREADTH INDICATORS
Market Breadth Indicators are still in buy mode but that does nor contradict with a sell off. We have a divergence on the McClellan Oscillator, Bullish Percentage is very weak, Percent of Stocks above MA50 almost touched the upper boundary of 75, Weekly Stochastic of the Summation Index overbought and can reverse if we see a red week. So its not a problem to see a top with this Market Breadth Indicators they just need some more time before reversing.
McClellan Oscillator - made lower high, the top could be in.
McClellan Summation Index - still in buy mode, no reversal signal.
Weekly Stochastic of the Summation Index - in overbought territory, no sell signal for now.
Bullish Percentage - still on buy, but very weak.
Percent of Stocks above MA50 - almost touched the overbought level 75. Intermediate term correction usually touch this level and reverse.
Fear Indicator VXO - flat the last weeks. I think its building a base before moving higher.

CYCLES (TD - trading days)
The small cycle currently at 18. I think this move lower will finish 20 day and 40 day cycles. The problem is based only on cycles I can not say which scenario will play out - higher low above 1345 with one more push higher or double top with lower low.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Countdown 13 finished so the top should be in.

Short term update

Divergence on the hourly chart and I think pullback to 1360 has started.

Weekly review

Short term view - higher prices ahead, but its difficult to predict the exact path of the small moves.
Intermediate term view - intermediate term bottom on June 4-th and higher prices till first half of August.

I told you to expect choppy moves through the summer:) So far my short term forecasts were pretty close - up to 1380 SP500 reached 1375, than down to 1320 and again wrong for 5 points the low was 1325. Its getting more and more difficult to predict the squiggles so focus on the bigger picture. And it tells me that we will see higher high early in August.

TECHNICAL PICTURE
Short term - nothing bearish for now. MACD is above the zero line. The histogram made a divergence and its now above zero too. I think that there is more upside. There is resistance between 1365 and 1375. At this levels we will see some kind of a pause or a pullback before moving higher to 1390.

Intermediate term - we saw a correction after a divergence on the histogram. The MACD is above the zero line, the prices found support at MA50, the histogram on the weekly chart is moving higher - simply said no bearish signs. I would prefer to see the correction lasting longer and the histogram making nice trough low burning off the bearishness... now it does not look very nice. Nevertheless intermediate term I expect move higher to the 1400 area.

The long term picture - the move so far is overlapping so I have abandoned the bullish scenario with high above 1422. I think the June low was not long term low just intermediate term. I expect new lows early next year.

MARKET BREADTH INDICATORS
Market Breadth Indicators are still in buy mode. I expect to see a divergence on the McClellan Oscillator before this move is over.
McClellan Oscillator - I think the indexes will make higher highs and the oscillator lower high marking divergence.
McClellan Summation Index - still on buy.
Weekly Stochastic of the Summation Index - reached overbought levels but it can stay there for several weeks.
Bullish Percentage - still on buy
Percent of Stocks above MA50 - in no mans land ~60. Divergence or reaching overbought state above 75 will be a red flag.
Fear Indicator VXO - not impressed from the sell off at all. I think we will see levels ~14 before an intermediate term top.
Put to Call Ratio - nothing interesting here.

CYCLES (TD - trading days)
I am not sure how to count the small cycles. 12 is too short but I can not be sure. So I will leave them till I see something more convincing.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
On the weekly chart we have setup on 5. On the daily chart combo at 8 and countdown at 9. This chart tells me we will see higher high before the move is over.

Short term update

UPDATE 11.07 - SP500 touched support ~1334 and bounced. Lets see how strong the bulls are.

So far the small moves have played out perfect - up to resistance and down to support.
Lets see if the prices stay in the wedge or my forecast for lower prices to ~1320 will be right. We will see divergence on the hourly histogram which means relief move up from support, but the histogram on the daily chart is till moving lower. The strength of the expected move up will tell us the story.

Weekly review

Short term view - difficult to predict the exact path, but I expect move lower to 1320
Intermediate term view - intermediate term bottom on June 4-th and higher prices till mid August.

Pretty close to what I was expecting - the SP500 futures touched 1380 and the upper trend line, the cash index made it only to 1375.

What is next? - On daily chart we have divergence on the Histogram so it will take time till its cleared. I think the wedge will be broken and a trend channel will be formed, which means move lower to ~1320 is underway.

TECHNICAL PICTURE
Short time - its difficult to predict the exact path of the small moves. I think that we will see flat correction. The first leg down was 54 points now we are in the second one. Another 54 points means move to around ~1320 and the target lies at the lower parallel line of the channel.

Intermediate term - the divergence on the histogram looks very ugly for the bulls. I am speculating that it will be worked out with more time than price retracement because the histogram on the weekly chart is still pointing up. I think we are currently in B of in A-B-C move and after mid July we will see another move higher.
If 1320 respectively the channel is broken, than the picture will be very bearish - new lows ahead.

MARKET BREADTH INDICATORS
Market Breadth Indicators are still in buy mode. McClellan Oscillator hit extremes again so this pullback is no surprise.
McClellan Oscillator - hit extremes but no divergence so this move should be a correction.
McClellan Summation Index - still on buy
Weekly Stochastic of the Summation Index - still on buy
Bullish Percentage - still on buy
Percent of Stocks above MA50 - in no mans land ~59, did not reach overbought levels so no red flag here.
Fear Indicator VXO - moved lower with SP500, so the traders are not worried about a correction.
Put to Call Ratio - still on buy

CYCLES (TD - trading days)
Small cycle currently 8 days long.... waiting for the low of this cycle before moving higher.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Currently we have combo/countdown at 8 and after this move is finished the indexes should continue moving higher. On Friday we saw price flip (close lower than 4 days ago). If I am right we will see a choppy move lower and not a setup.