Weekly review

Short term view - I think the next week will start positive
Intermediate term view - I think we are near to a short term bottom

Well I was wrong about the short term bottom last week and now the picture looks more complicated with several possible scenarios, but the bigger plan stays the same the indexes are toping and we will see a serious correction. This leg since 2.August is choppy and corrective and it is not the "serious" correction:)

Short term on the hourly chart the SP500 looks like it is bottoming at support - two candles with long shadows and weak move lower to support. I think next week will start positive. Probably the index will move above 1646 and reach the upper range of this congestion zone 1645-1660, the MA50 on the daily chart is around this level 1660 too.... I can not say if this will be part of wave B before moving lower to ~1600 or this is the expected short term bottom and move to 1685-1700 will begin. A lot of divergences on the oscillators and cycles favor more the red scenario.
Analysis can be confusing but the trading plan is simple - if on Tuesday the index opens higher buy it and you have tight stop ~1626 the previous two lows where at 1627 and 1628. If it opens lower is sell with target 1600.

TECHNICAL PICTURE
Short term - long weekend, no strike in Syria this weekend.... this should be positive? The signs are for a positive opening, but it could be gap bellow 1625 and reversal who knows. My bet is short term bottom soon, move higher followed by another leg lower.

- Triple cross(EMA10 and EMA20 crossing EMA50) - no cross short term trend is still down.

Intermediate term - the picture has became more difficult to predict... the exact path to be more precise. I do not know the exact path but I expect some relief move to the upside and one more leg lower before this intermediate term correction is over.

- Trend direction EMA50/MACD - the price is bellow MA50 and MACD bellow zero the intermediate term trend is down.
- Momentum Histogram/RSI - momentum has turned up and we have divergences.

Long term - no change, the indexes are following the plan. We have MACD divergence and the previous three occasions have signaled for serious correction ahead.....

- Trend direction EMA50/MACD - long term trend is up, but MACD and the oscillators show divergences and we must be prepared for a bigger correction.
- Momentum Histogram/RSI - momentum is pointing down, intermediate term trend is down.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - after the lower low the oscillators are showing now divergences after the oversold levels last week. The trend indicators all are still pointing lower. This is according to the plan - short term bounce higher and another leg lower.
McClellan Oscillator - hit oversold level and now with double divergence.
McClellan Summation Index - sell signal, correction not over.
Weekly Stochastic of the Summation Index - sell signal, but reached oversold levels. We might see something on the upside, probably after several weeks and 20 week cycle bottom.
Bullish Percentage - sell signal pointing lower, but still at higher levels.
Percent of Stocks above MA50 - nearing the 25 level where correction usually bottom. I think this move will be from higher degree and bigger than a correction and this levels of the indicator will mark only the end of the first leg down.
Fear Indicator VXO - outside of the bollinger bands several times. Cool off is expected.
Issues Advancing - divergence the advancing stock are getting more
Issues Declining - divergence the declining stocks are getting fewer.


HURST CYCLES
Last week bottom looked like 40 day cycle bottom.... same story this week:) with the divergences this time it could be really the 40 day cycle bottom and the expected short term bottom.

At week 10 the intermediate term correction should have several more weeks to go.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At 4 of a setup. If SP500 does not close bellow 1627 on Tuesday we will have another price flip..... and short term bottom?

No change the next week of the setup currently at three.

Signals

Short term signal: DOWN - it will turn up above 1646.
Intermediate term signal: DOWN - it will turn up above 1646.
Comment: The bears with perfect timing pushed the price lower after SP500 hit exactly 1646. Sometimes I am amazed how perfect the market could be. Yesterday I was not sure if b wave up is over and now we have 3 waves up reversing from resistance. If the market wants to move lower, it has nothing to do to the upside anymore. We know now where the line in the sand is - 1646. The perfect move will be lower to 1600 where A=C and W=Y.
Many oscillators with divergences so watch carefully for higher low with something like double bottom. (see the chart bellow)

Watch price behavior for clues:
- short term bottom - price should find support between 1625-1630 followed by 2-3 strong days and price moving above 1655-1660.
- move lower continues - max weak bounce staying bellow 1650 (check), now we should see move lower for 2-3 days.

Levels to watch SP500:
- 1645-1655 important area, congestion zone, now it is a resistance.
- 1598 is major support.

Update

If we do not see weakness in the afternoon session and the price do not start moving lower, the probability will be very high that the move lower since 2.August is over - McClellan Oscillator and histogram divergence on the daily chart.

Signals

Short term signal: DOWN - it will turn up above 1646.
Intermediate term signal: DOWN
Comment: SP500 touched 1627 just shy of the support level 1626 and bounced higher as expected. The price action confirms for now that this is not a new move lower. When a new move starts a huge bar ignites selling(or buying) and there is follow through for several days and not 50% retracement on the next day.
Short term prediction is difficult at the moment. I do not know if wave b is over and the last selling has begun or there is one more push to ~1645-1650. We have long weekend, war in Syria??.... but I would watch for opportunities on the long side in the next days.

Watch price behavior for clues:
- short term bottom - price should find support at 1625, 2-3 strong days and price moving above 1655.
- move lower continues - max weak bounce staying bellow 1650.

Levels to watch SP500:
- 1645-1655 important area, congestion zone, now it is a resistance.
- 1598 is major support.

Update

The main idea stays the same, the path has changed slightly.
Weekly Stochastic of the Summation Index is already oversold, McClellan Oscillator is preparing for divergence... my bet is that this is not a major leg down. I think this is the final leg for the move since 2.August, which should bottom around 1600-1575 than we should see the third top from a topping process.

Signals

Short term signal: DOWN - it will turn up above 1646.
Intermediate term signal: DOWN
Comment: As I have said yesterday this move up looks terrible. A little bit surprised from the strength of the move lower, but that is why we have signals.
Keep it simple - down is down. Next support levels are 1625 and 1600. The first move lower was 70 points. From the top from yesterday 1670-70=1600... interesting:) Probably bounce from 1625 to 1645-1650 and than lower to 1600. If a bounce moves above 1655 the move lower probably has finished.

Watch price behavior for clues:
- short term bottom - price should find support at 1625, 2-3 strong days and price moving above 1655.
- move lower continues - max weak bounce staying bellow 1650.

Levels to watch SP500:
- 1645-1655 important area, congestion zone, now it is a resistance.
- 1598 is major support.

Signals

Short term signal: NEUTRAL - it will turn down bellow 1646 and up above 1661.
Intermediate term signal: DOWN
Comment: a little bit more to the upside as expected, 1670 almost touched... such price behavior fits more to a corrective move. Usually a rally from a bottom starts explosive and you see in the first three days strong move up. Go through the charts and look at the first three bars from every bottom.
The current move up is at day three and looks... terrible:) I will not be surprised to see lower low on the Dow for example.

Watch price behavior for clues:
- short term bottom and corrective move up - retracement should soon begin with a top for the current wave up bellow 1675.
- a rally to new highs (if I am wrong) - two or three strong green candles moving above 1682 and 1700.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important area, congestion zone. Retracement of the current advance should stay in this area.
- 1598 is major support.

Short term update

Possible path...

Signals

Short term signal: UP - it will turn down bellow 1646.
Intermediate term signal: DOWN
Comment: If I am right we in correction of the correction:) It is not the best time to follow the signals because the confirmation comes too late the moves are soon over and you can not squeeze a lot. If this a correction it will be a move with three waves. Wait the current one to retrace some of the advance and jump on the third wave it should be stronger.

Watch price behavior for clues:
- short term bottom and corrective move up - retracement should soon begin with a top for the current wave up bellow 1675.
- a rally to new highs (if I am wrong) - two or three strong green candles moving above 1682 and 1700.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important area, congestion zone. Retracement of the current advance should stay in this area.
- 1598 is major support.

Weekly review

Short term view - more upside but most probably choppy move, it should be corrective move.
Intermediate term view - the indexes are in the middle of a correction now.

As expected we saw short term bottom this week. I have forgotten to mention that the FOMC Minutes marked a bottom/top.... again

I wrote about McClellan oscillator and this chart is my guidance for the intermediate term. There is two options according to the McClellan oscillator - the correction is over and the second the first leg of the correction ended two days ago. The move lower does not look finished that is my feeling looking at the charts, so I will bet on that we will see another leg lower after the current move up is over. I will change my mind if I see strong impulsive move above 1700.
If I am right we should see move up for a while 8-10 trading days, which should be choppy with corrective nature and it will not violate 1700.

P.S A good article from Adam Hamilton. Basically he says the same what I am saying for months with my Long term chart. The circled areas are not marked just like that because I am a bear and I am expecting the crash. It is about long periods without correction. They always end the same way - topping sequence and deep correction 15%-20%. The sequence consists of 5 moves and the first three of them are following the plan perfectly. As Adam Hamilton says there is too much greed and it must be purged from the system. In the previous two occasions the bull was still young and we saw just correction, but now the bull is very mature and this top could be the top for the cyclical bull as in 2007.

TECHNICAL PICTURE
Short term - SP500 managed to move above resistance and MA50 on the daily and hourly chart. The move does not look strong and impulsive and I expect some retracement soon before continuing higher.

- Triple cross(EMA10 and EMA20 crossing EMA50) - there is no cross for now, probably on Monday.

Intermediate term - the price touched the lower trend line and MA50. Usually you see a bounce in such occasions, especially when the oscillators are oversold. SP500 will move up for a while but after that it should plunge to the longer term trend line and MA200.
If I am wrong a new leg higher has begun - red scenario. The signs for that will be a strong move up in the next day or two and break above 1700.

- Trend direction EMA50/MACD - the price is playing with MA50 and MACD with the zero line, expect some bounce. The MACD divergence says the intermediate term trend is down.
- Momentum Histogram/RSI - momentum turned up.

Long term - no change, the indexes are following the plan. We have MACD divergence and the previous three occasions have signaled for serious correction ahead.....

- Trend direction EMA50/MACD - long term trend is up, but MACD and the oscillators show divergences and we must be prepared for a bigger correction.
- Momentum Histogram/RSI - momentum is pointing down, intermediate term trend is down.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - the trend following indicators are in no man's land, no signs for a top or bottom. I would say rather in the middle of a correction. The oscillators like McClellan Oscillator and Issues Declining are oversold and we are seeing the expected reaction.
McClellan Oscillator -
McClellan Summation Index -
Weekly Stochastic of the Summation Index -
Bullish Percentage -
Percent of Stocks above MA50 -
Fear Indicator VXO -
Issues Advancing -
Issues Declining -


HURST CYCLES
The 20 day cycle has bottomed right on time and the 40 day cycle made very nice curve almost perfect:) The next 20 day cycle has begun and we should see at least another 5-10 trading days higher prices.

At week 9 of a 20 day cycle. The average cycle size is 14-16 weeks and the shortest was 11 weeks. This is one of the reasons why I do no think that we hit a bottom and the next rally higher has begun. The cycle topped out earlier at week 6, which means expect a move lower of a bigger degree and 8 weeks is way to short for the cycle to end.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We saw a price flip, which strengthens the case for a short term bottom.

No change the next week of the setup currently at two.

Signals

Short term signal: DOWN - it will turn up above 1660.
Intermediate term signal: DOWN
Comment: SP500 touched the neckline and MA50 at 1660... but the move is somehow not convncing,DJ is very weak. It smells more like the red scenario. We will know more tomorrow. Watch the open,for the green scenario it should be above the close today,resistance and MA50.

Expected behavior for:
- short term bottom - strong day tomorrow, or worst case right shoulder but the price to stay above 1645 and another strong green candle on Monday.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important area, congestion zone. SP500 should move above it to confirm short term reversal.
- 1598 is major support.

Short term update

Now the charts have the right look for a short term bottom - NYMO divergence, the histogram turned up. On SP500 we see several day of deceleration, the price has inertia like everything in the nature and if you look at the daily chart you will see how it tries to take the turn:) Another interesting point is how the last four days are struggling with MA50. The bulls need to move the price above it, than we will have confirmation for a short term bottom.

10 min chart look at the resistance... at this level is MA50 on the daily. I think we have short term bottom and one of the scenario bellow will play out - green move above resistance and retest, or red inverse H&S.

Signals

Short term signal: DOWN - it will turn up above 1660.
Intermediate term signal: DOWN
Comment: a lot of volatility after the FOMC Minutes down-up-down... it still does not look like a bottom unless the bulls show up tomorrow

Expected behavior for:
- short term bottom - strong green candle in the next day or two.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important area, congestion zone. SP500 should move above it to confirm short term reversal.
- 1598 is major support.

Signals

Short term signal: DOWN - it will turn up above 1660
Intermediate term signal: DOWN
Comment:SP500 moved bellow support yesterday, but we did not see acceleration to the downside. With all the signs for a oversold market(short term) a green day is not a surprise. I think that we saw the bottom or in worst case test of the low before moving higher for a week at least.
Tomorrow is FOMC Minutes, lets see if they will mark top/bottom as usual.

Expected behavior for:
- the drop continues - another long red candle... with follow through (very unlikely).
- start bottoming(short term) - move back above ~1660 which is last minor low, support and MA50 daily.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important support. Move bellow it means drop to the next support level ~1625.
- 1598 is major support.

McClellan Oscillator and corrections

The McClellan Oscillator is a great tool to identify bottoms.... not at every bottom you will see an NYMO extreme to warn you, but when you see values between -80 and -110 a bottom is around the corner. What kind of a bottom? - make you homework and assess the market. It can be short term or intermediate term bottom. NYMO is just an oscillator and it will not warn you about trend change.
Look at the chart bellow and you will see an indicator which is very reliable when you watch for extremes.

This brings me to the situation today and why I post the chart. I saw NYMO at -80 on Friday and I wrote that short term bottom is near. I did not know what will happen on Monday it could always move lower as it did(now at -100). If NYMO continues with it's 100% successful track record:) based on the chart bellow there is two options - the correction is soon over and the second option the first leg of the correction is over.
Lets say I am right and this is just the first leg:) there is two occasions with similar corrections when NYMO hit extremes(marked with the big circles) for the first and the second leg of the correction. What happened after the first extreme(marked with arrows) - multi day rebound occurred 9 and 15 trading days. I expect the scenario to repeat, not only NYMO is oversold there is other signs too. I expect a relief at least for a week.

Signals

Short term signal: DOWN - it will turn up above 1660
Intermediate term signal: DOWN
Comment: Whole day the price is drifting lower from the upper boundary 1660 to the lower boundary 1650 of the support range.... The action looks bearish to me. I think one more drop is necessary, but the bears must show up now or not later than tomorrow.

Expected behavior for:
- the drop continues - another long red candle tomorrow.
- start bottoming(short term) - move back above ~1660 - last minor low, support and MA50 daily.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important support. Move bellow it means drop to the next support level ~1625.
- 1598 is major support.

Signals

Short term signal: DOWN - it will turn up above 1667 last minor high
Intermediate term signal: DOWN
Comment: SP500 is at level where it is logical to expect a bottom, but there is no signs for a bottoming. It could easily drop another 20 points to kill the early dip buyers and attract more bears before a retracement. Watch the opening, if SP500 opens bellow the Friday close 1655 and moves in the next one hour bellow support 1650 the odds will favor another drop. If Sp500 opens higher than 1655 the odds will be higher, that the index has started bottoming.

Expected behavior for:
- the drop continues - open bellow the close from Friday moving fast bellow support 1650.
- start bottoming(short term) - open above the close from Friday

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important support. Move bellow it means drop to the next support level ~1625.
- 1598 is major support.

Weekly review

Short term view - I expect to see a short term bottom in the next day or two.
Intermediate term view - Intermediate top on 2.August and the indexes are in the middle of a correction now.

Move lower to the 1650-1660 area as predicted, but there is one "BUT":) that happened at the end of the week. The weekly chart looks now ugly, which changes the plan and any move higher should be just a retracement in a corrective move lower.

The daily chart was giving signals that it is nearing a short term bottom and I was not sure if one final high is in the cards. Yes SP500 reached my target and we are near to a short term bottom BUT the situation has changed. The sell off came at the end of the week and the indexes closed near the lows for the week. Now the weekly chart and the market breadth indicators are telling me that we are in a correction. We have bigger time frame(weekly) pointing down and smaller time frame(daily) saying expect something on the upside. The bigger time frame usually wins, but after the signal from the smaller time frame plays out.
In short - we should see short term bottom and move higher, but it should be only a retracement in a bigger move lower.
Why I think that we are near to a short term bottom - SP500 reached support level, MA50, 38.2% Fibo (from June), the histogram reached oversold levels(see second chart), McClellan Oscillator oversold, issues advancing/declining oversold. This usually happens around bottoms.

TECHNICAL PICTURE
Short term - there is no signal for a bottom for now. It is difficult to predict what will happen on Monday, but I think that we are near to a bottom.

- Triple cross(EMA10 and EMA20 crossing EMA50) - MACD is bellow the zero line and EMA10/EMA20 bellow EMA50 - short term trend is down.

Intermediate term - I wrote above, why I think that we should see a retracement... now we will wait and see if I am right.

- Trend direction EMA50/MACD - MACD still above zero and prices above EMA50, but with the divergences we have and the weekly chart I would said the intermediate term trend is down.
- Momentum Histogram/RSI - momentum is pointing down.

Long term - no change, the indexes are following the plan. We have MACD divergence and the previous three occasions have signaled for serious correction ahead.....

- Trend direction EMA50/MACD - long term trend is up, but MACD and the oscillators show divergences and we must be prepared for a bigger correction.
- Momentum Histogram/RSI - momentum is pointing down, intermediate term trend is down.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - the trend following indicators say for several weeks we are in correction, the oscillators like McClellan Oscillator and Issues Declining are oversold. We should expect reaction.
McClellan Oscillator - oversold bellow 80, but you can always see another day or two of selling.
McClellan Summation Index - sell signal. The market made new high, but the indicator does not reached even near to the previous high warning us for very weak market internals.
Weekly Stochastic of the Summation Index - sell signal. The indicator says we are in the middle of a swing lower.
Bullish Percentage - still above 75, but with huge divergence with the previous high and now with sell signal.
Percent of Stocks above MA50 - at 52, we are in the middle of a correction.
Fear Indicator VXO - shoot up above the bollinger band, usually followed by a rebound in the opposite direction.
Issues Advancing - reached extreme, some reaction expected
Issues Declining - reached extreme, some reaction expected


HURST CYCLES
We are near to 40 day cycle low which confirms that we should expect short term bottom.

The current 20 week cycle toped very early at week 6, which means the 40 week and 18 month cycles are already pointing down. This is consistent with my expectation for a correction of a bigger degree.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have price flip on the daily and weekly chart..... shame on me, I have counted wrong the countdown on the weekly chart. It has finished perfect at 13 exactly at the top.

Signals

Short term signal: DOWN
Intermediate term signal: DOWN
Comment: After three days of sideway action I thought that the bears will not manage to break bellow the range, but here we are....
1682 was the line in the sand and after the price moved lower both signals are pointing down now.
On the weekend I wrote pullback to 1650-1660. SPX500 touched the upper boundary of the range and we will see what happens in the next several trading days.

Expected behavior for:
- the big slide lower has begun - 1 day, max 2 days pause around 1650 and sell off.
- only a pullback - the huge bar is selling climax and we should see some bottoming in the next two-three trading days.

Levels to watch SP500:
- 1682 is now resistance
- 1650-1660 important support. If this is only a pullback, the price should not move bellow this area.
- 1598 is major support.

Signals

Short term signal: NEUTRAL
Intermediate term signal: UP as long the price stays above 1682
Comment: No follow through, the bulls failed to push higher. The prices stay trapped in the range... in no man`s land.

Expected behavior for:
- I do not know what to expect....

Levels to watch SP500:
- 1700 minor resistance to the upside. If the price moves above it we will have double bottom with target ~1720.
- 1682 is now support. If the price moves bellow it the intermediate term direction will turn down.
- 1650-1660 important support, the pullback should not move bellow this area, or this is more than a pullback.
- 1598 is major support.

Signals

Short term signal: UP as long the price stays bellow 1686
Intermediate term signal: UP as long the price stays above 1675
Comment: the bulls are winning the battle for now... not surprised at all. The bears just do not have the strength to move the price bellow the range from the last 4 weeks. The price moved above the last minor high, EMA50 on the hourly chart and broke the trend line which turned the short term signal UP.

Expected behavior for:
- the pullback is over -> another green day tomorrow moving above 1700

Levels to watch SP500:
- 1700 minor resistance to the upside. If the price moves above it we will have double bottom with target ~1720.
- 1675 is now support. If the price moves bellow it the intermediate term direction will turn down.
- 1650-1660 important support, the pullback should not move bellow this area, or this is more than a pullback.
- 1598 is major support.

Signals

Short term signal: DOWN as long the price stays bellow 1696
Intermediate term signal: UP as long the price stays above 1675
Comment: The price action is more favorable for the bulls and confirms my expectation for one last move higher... at least for now. The question is only if the bears will have the strength to move the price bellow the range from the last 3-4 weeks to the next support level 1675.

Expected behavior for:
- the pullback to continue -> clear move down not like the previous days up and down and candles with small range bodies.
- the pullback is over -> move above the last minor high 1696 and EMA50 on the hourly chart

Levels to watch SP500:
- 1700 minor resistance to the upside. If the price moves above it the pullback is over.
- 1675 is now support. If the price moves bellow it the intermediate term direction will turn down.
- 1650-1660 important support, the pullback should not move bellow this area, or this is more than a pullback. - 1598 is major support.

Closer look at the hourly chart... Another day of indecision and low volume. The bullish scenario is shown on the chart - small double bottom with positive MACD divergence.

Signals

Short term signal: DOWN as long the price stays bellow 1700
Intermediate term signal: UP as long the price stays above 1675
Comment: We are near to or we saw intermediate term top. Trying to collect the last dollars is not worth any more. It is time to take profits and think about short positions.

Expected behavior for:
- pullback - clear moves down not like the previous days up and down and candles with small range bodies.

Levels to watch SP500:
- 1700 minor resistance to the upside. If the price moves above it the pullback is over.
- 1675 is now support. If the price moves bellow it the intermediate term direction will turn down.
- 1650-1660 important support, the pullback should not move bellow this area, or this is more than a pullback. - 1598 is major support.

Weekly review

Short term view - the short term is not very clear, I think the move lower is not over.
Intermediate term view - we are nearing an intermediate term top...

I am back from holiday and I will resume regular posts. Nothing really interesting this 3-4 weeks, just sideway action... no surprises.

For the short term I am not sure, but I think the pullback is not over(as long as the price is below 1700) and we will see another push lower - support and MA50 are around 1650-1660. The indicators are showing for a while that the indexes are in some kind of pullback and they are clearing the overbought conditions, but the price is moving sideways. That makes me think that after the pullback we will see another push higher.
The bigger picture - a lot of divergences on the daily charts,weekly charts, market breadth indicators... I think the indexes are near to an intermediate term top. This is what I am showing for months so no surprise. The only question is if we will see short term last push higher or the top is in for this move at 1710.

TECHNICAL PICTURE
Short term - last minor support ~1700 has been broken and tested yesterday (I have warned you about that in the previous post:). I expect the pullback to continue next week followed by another push higher before the real move lower to begin.

- Triple cross(EMA10 and EMA20 crossing EMA50) - MACD is bellow the zero line and EMA10/EMA20 bellow EMA50 - short term trend is down

Intermediate term - If I am right the price will test support and MA50 and move higher again. If I am wrong we already saw an intermediate term top at 1710 and after short pause around 1650-1660 the price will continue moving lower - the red scenario.

- Trend direction EMA50/MACD - intermediate term trend is still up, but we have a lot of divergences. We must be careful for trend reversal.
- Momentum Histogram/RSI - momentum is pointing down.

Long term - no change, the indexes are following the plan. We have now MACD divergence... see the chart, the previous three occasions have signaled for serious correction ahead and the indicator were right.

- Trend direction EMA50/MACD - long term trend is up, but MACD and the oscillators show divergences and we must be prepared for a bigger correction.
- Momentum Histogram/RSI - momentum is pointing down.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - show that market internals are weak.... divergences everywhere but the market players are very complacent once again.
McClellan Oscillator - negative for several weeks already. You can say the market is very weak the top is in and it will plunge to the oversold levels ~100, or the market is in a pullback the indicator is around normal levels -55/-60 for a such move and now we should see last final push higher with divergence... The short term is difficult to predict, but intermediate term we should see(we saw) a reversal.
McClellan Summation Index - sell signal. The market made new high, but the indicator does not reached even near to the previous high warning us for very weak market internals.
Weekly Stochastic of the Summation Index - sell signal. The indicator says the swing higher is already over.
Bullish Percentage - still above 75, but with huge divergence with the previous high.
Percent of Stocks above MA50 - still on buy, but with huge divergence with the previous high.
Fear Indicator VXO - the market players are very complacent once again and VXO is spending time in the oversold area 10-12.
Issues Advancing - only few advancing issues
Issues Declining - a lot of declining issues


HURST CYCLES
We are in the second 20 day cycle and I think the low for the pullback will be the 40 day cycle low.

week 7 or in the middle of the third 20 week cycle. I think the top for this cycle will be and the top for the cycle of much higher degree - the 18 month cycle. Average length is 14-16 weeks so we are exactly in the middle of the cycle. It should top earlier because the 18 month cycle starts pulling the prices lower. That means that we saw the top already or it should follow in the next 2-3 weeks max.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Tom Demark sequential daily and weekly say - "you are right, you are right, just one more push higher":)) Usually when the daily and weekly counts finish at the same time this is an important signal. Lets see if we will see one more push higher to finish the daily and weekly countdowns.

At 12 of a combo and 10 of a countdown, one final high will do the job the counts to be finished.

At 12 of a countdown, one final higher high is missing.

Short term update

Divergences everywhere... be careful. Last minor support level 1698-1700. If the price moves bellow it, expect at least a pullback.