Weekly review

Short term view - pullback to MA50 hourly?
Intermediate term view - waiting the choppy move to finish and a correction for 2-4 weeks.

"The pullback" was just a sideway move in a 10 points range.... and the target 1920 was hit.

The forecast - this should be wave 3 of ED and wave 4 lower to 1860 +-10 should start next week. It is based on EW and cycles - see the previous post.
I am following the pattern for months and for 4-5 weeks I have mentioned the target 1920 - we are here now.... SP500 looks strong, break out, another rally bla bla the usual bullish stuff.
Now before throwing out the forecast through the window:) I will wait to see what happens next week. In fact if you look at DJ or Russell2000 they do not look so strong. DJ did not made a new ATH.... probably it will squeeze it next week before a reversal.
Do not forget trading is something different and the plan is very easy now - long until you see lower high or higher high with divergences. When you see this there is high probability that this will be a pullback to around 1860 and than you can try short trade.

TECHNICAL PICTURE
Short term - 1-2-3-4-5 is the ED. There is no signs for a reversal. On the chart is shown what should we see if the forecast is right and we see a short term top followed by wave 4 of the ED.

- Triple cross(EMA10 and EMA20 crossing EMA50) - short term trend is up.

Intermediate term - this is the ED idea... we will see if it works.

- Trend direction EMA50/MACD - the intermediate term trend is up.
- Momentum Histogram/RSI - momentum is up.

Long term - I do not think that any move higher will clear the MACD divergence and start another long lasting rally. I think the next big move will be lower, but it could last months until we reach this point.

- Trend direction EMA50/MACD - the long term trend is up - the price above MA50 and MACD above zero. The MACD divergence should make you worry, that the long term trend is topping.
- Momentum Histogram/RSI - momentum is up.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - are pointing up, but no signs of a strength..... only high complacency.
McClellan Oscillator - nothing interesting....
McClellan Summation Index - buy signal, but could not really move strong higher. Still lower high.
Weekly Stochastic of the Summation Index - neutral....
Bullish Percentage - above 70... buy signal. Long term divergences flashing red.
Percent of Stocks above MA50 - managed to move above 75... the nex lower high?
Fear Indicator VIX - extreme complacency.... just a hundredth from the lowest reading for the whole bull market.
Advance-Decline Issues - moved up, but not convincing at all.
Put/Call ratio - I suspect the next lower high....
Percent of Stocks above MA200 - another lower high....


HURST CYCLES
Day 33 - we should see the indexes moving lower soon towards the expected 40 day and 80 day cycle low.

Waiting for a correction to finish the 20 week cycle....

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At 7 of a sell setup. There is high probability it will be finished. Wait for a price flip if you want to short.

It is interesting that even with all this choppy moves we have 6 of a setup on the weekly chart. I will be surprised if it would be finished, but who knows.....

Update

A holiday in Europe and I have some time to look at the charts:)

Short term - I think the small pullback has begun one day and 10 points later.... I think target is around 1900 and another move higher to around 1920 should follow.

Intermediate term the European markets are showing again much clearer picture. I think this is wave 3 of an ED and wave 4 and 5 should follow trough the summer.
If you think in terms of cycles the current 20 week cycle is already mature, which means - first we should see something to the downside but not for a long 2-3 weeks max, second it is topping very late and the next 20 week cycle should make new highs.

If I combine EW and cycle I see this for the next 2-3 months:

Weekly review

Short term view - probably a pullback to MA50 on the hourly chart.
Intermediate term view - waiting the choppy move to finish and a correction for 2-4 weeks.

So my preferred scenario ED is playing out. The European markets were giving the hint, but with this indicators I prefer to follow the market not my feelings:) The trading plan was ok if you were flexible and ready to change the direction without to hesitate.

Short term - I think any move lower will bounce up at support and MA50 (see the hourly chart). After that if you see a lower high or higher high with divergence than it is time for shorts.

Intermediate and Long term traders - WAKE UP:) after three months in coma I think the market will start moving again. What I expect is a standard pullback 4%-6% for 2-4 weeks, than the highs to be tested marginal higher high or lower high we will see and than a bigger correction 10% (see the daily chart).
For the swing traders it easy - just follow the market and the swings. The long term traders should think about it twice... there is high probability that this is an important top. You can take for example 25% profits after the current move tops out and another 25%-50% after a failed retest of the high and open short position. It depends on you but have a plan with double divergences MACD and RSI on the weekly chart do not be the bag holder.

TECHNICAL PICTURE
Short term - the smaller time frames show show triple MACD divergence... I suspect a drop to support/MA50 and than we will see what happens.

- Triple cross(EMA10 and EMA20 crossing EMA50) - short term trend is up.

Intermediate term - this is what I expect in the next several months. Pullback to MA200 and lower trend channel(yellow), retest of the highs and a correction to the lower trend channel(purple). The SP500 can not move above the middle trend line which is a sign for a weakness. If I am wrong the market should prove it and blast above it with target the upper trend line.

- Trend direction EMA50/MACD - the intermediate term trend is up, but the divergence is a warning sign for a pending trend change.
- Momentum Histogram/RSI - momentum is up

Long term - I do not think that any move higher will clear the MACD divergence and start another long lasting rally. I think the next big move will be lower, but it could last months until we reach this point.

- Trend direction EMA50/MACD - the long term trend is up - the price above MA50 and MACD above zero. The MACD divergence should make you worry, that the long term trend is topping.
- Momentum Histogram/RSI - momentum is up.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - turned up but nothing special... no confirmation of a strength.
McClellan Oscillator - moved above the zero line.
McClellan Summation Index - still sell signal and lower high...
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - massive divergences, but short term still above 70... sell buy signal.
Percent of Stocks above MA50 - can not move up to 75... internals veeery weak
Fear Indicator VIX - extreme complacency.... just a hundredth from the lowest reading for the whole bull market
Advance-Decline Issues - in the middle of the range.... internals veeery weak
Put/Call ratio - I suspect the next lower high....
Percent of Stocks above MA200 - another lower high....


HURST CYCLES
Day 29 - we should see the indexes moving lower soon towards the expected 40 day and 80 day cycle low.

Waiting for a correction to finish the 20 week cycle....

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Another price flip... choppy moves nothing interesting.

It is interesting that even with all this choppy moves we have 5 of a setup on the weekly chart.

Update

From the weekend - "Around 1890 if we see a bearish candle - short with stop above the high for the day. If we do not see a follow trough to the downside on the next day, instead we see another higher low, we will switch again to the long side. You must be flexible:)"
No follow trough and higher low. I know that it is frustrating when the market is reversing several days in a row... but it is what it is. I told you, you must be flexible.
My suspicion that the markets are not finished to the upside looks confirmed....

Update

Green Monday as expected and if you are short you do not need to worry which scenario will play out.
I have changed the ending diagonal idea -> A-B-C to 1850 should finish wave 4 from an ED. The indicators look bad and the only "prove" which I have for an ED are the European indexes, where it looks like the scenario with the higher probability. The DAX for example the current short term move lower is extremely choppy and it is corrective.

But as I said if you are short you do not need to worry. Just watch what happens around 1850. For the red scenario the price should move easily bellow minor support 1850 and important support 1840.

Weekly review

Short term view - green on Monday
Intermediate term view - waiting the choppy move to finish and a correction for 2-4 weeks.

The choppy move since mid April continue... The facts - the indicators look ugly, the move continue making higher lows and higher highs and finds support at MA50(see the second chart). Looking beyond the short term action and the choppiness, intermediate term you should prepare for a move lower to around 1800 at least.

I see some conflicting signals if I look at the DJ and SP500 I would say expect lower high H&S and move lower(red scenario), but if I look at other indexes I see one more move up is missing(green scenario) - Russell2000 made another lower low with RSI and MACD divergences, DAX is missing wave 5 of an Ending diagonal....

Such choppy moves always finish the same way - at one moment you will see lower high/higher low. Instead speculating if the move has finished I will wait for such sign. Until than the trade remains long... for the short term.
Around 1890 if we see a bearish candle - short with stop above the high for the day. If we do not see a follow trough to the downside on the next day, instead we see another higher low, we will switch again to the long side. You must be flexible:)

TECHNICAL PICTURE
Short term - It think the indexes will try to move higher on Monday and than we will see what happens - H&S or some kind of a choppy ED.

- Triple cross(EMA10 and EMA20 crossing EMA50) - not clear

Intermediate term - Dancing around the middle trend line and MA50.... the move does not show strength, but we still have no confirmation for a reversal - lower high.

- Trend direction EMA50/MACD - still up, but very weak.
- Momentum Histogram/RSI - momentum turned lower.

Long term - I do not think that any move higher will clear the MACD divergence and start another long lasting rally. I think the next big move will be lower, but it could last months until we reach this point.

- Trend direction EMA50/MACD - the long term trend is up - the price above MA50 and MACD above zero. The MACD divergence should make you worry, that the long term trend is topping.
- Momentum Histogram/RSI - not clear direction.


MARKET BREADTH INDICATORS
The Market Breadth Indicators - serious divergences everywhere....
McClellan Oscillator - could not make higher high and moved bellow the lower BB... now we are seeing a bounce as expected.
McClellan Summation Index - sell signal with divergence.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - massive divergences, but short term still above 75... sell signal not triggered.
Percent of Stocks above MA50 - can not move up to 75... internals veeery weak
Fear Indicator VIX - high complacency again... in a territory where we see a bottom usually.
Advance-Decline Issues - in the middle of the range.... internals veeery weak
NYSE New Highs-New Lows - massive divergences....
Percent of Stocks above MA200 - diverging again...


HURST CYCLES
Looking at the chart I would say the second 40 day cycle topped out at day 21 in the middle of the cycle and correction to finish the 40day and 80 day cycle should follow.

Waiting for a correction to finish the 20 week cycle....

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have a price flip and 1-2 of a setup... next week we will know if this is the real deal.

Update

Very choppy and boring week... today SP500 reached the first target at last. Looking at the other indexes I think SP500 will reach the next target 1920.
Nothing to worry about as long as it stays above 1880 - the gap and MA50 hourly.
Nasdaq looks like it wants to move higher to 3700, Russell 2000 made lower low with MACD divergence which means we should see more to the upside in the next couple of days.

Short update

The chart updated bellow....

From last week - "I think we have finished a-b-c at the moment. So either the correction should finish or it could mutate in something more complicated... another wave x and than y. Again for the bullish case I would prefer this move lower to finish above 1850."
The market chose the more complicated structure and made lower low, but without any technical damages.
You can not deny the beauty of Fibonaci an Elliot waves:) - SP500 touched 1850 an 50% retracement. Wave Y with the same size like W and W as three wave structure with C=1,618xA

I think there is a little bit more to the upside left. Using the same relations the targets are 1895 and 1920. But do not fall in love with this "rally". The bigger picture says the next move lower should follow to finish the 20 week cycle with a low probably the first half of June. SP500 and DJIA look strong, but if you look at Russell2000 and Nasdaq they are very weak. There is a very high probability that we are in the middle of a multi-month topping process. I do not think that this is the time to chase something to the upside unless you are a short term trader.