Weekly review

Short term view - we should see a move lower next week
Intermediate term view - pullback after a short term top and another move higher.

Nothing new, just the charts updated. Now everything looks ready for a move lower - bearish candles, divergences histogram/RSI/slow stochastic on different indexes(best visible on Russell200), market breadth, cycles at day 31 from 40 day cycle, TomDemark countdown completed..... only a pullback next week is missing:)
Anyway I think the idea to take some profits this week was not a bad idea at all.

TECHNICAL PICTURE
Short term - the first move lower should find support around 2040 followed by a lower high and than lower again to at least 23,6% Fibo retracement.

Intermediate term - waiting for a short term top and to see how the move lower will look like. Targets for the pullback the previous high and MA50

Long term - the long term picture is unchanged.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - a lot of divergences.... long term indicators are still rising, but a pullback is due.
McClellan Oscillator - lower high and divergence.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, but in overbought territory.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - buy signal... pullback overdue after hitting overbought levels.
Fear Indicator VIX - another higher low.
Advance-Decline Issues - lower high.
NYSE New Highs-New Lows - lower high and divergence.


HURST CYCLES
Day 31 of the current 40 day cycle. I think next week we should see a move lower.

Week 6 of the current 20 week and 40 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The countdown is completed. Now if we see a move lower it will be perfect:)

EEM

Happy Thanksgiving to the readers in the USA:)

I was asked several times about EEM (emerging markets) and this index mirrors perfect what I think will happen in the long term so I have decided to post one chart.
From EW perspective the count is very clear in contrast with other markets. Clear 5 wave impulse from 12.2008 to 05.2011. Clear corrective structure for the last several years which needs last final plunge lower. After an impulse and correction another impulse higher should follow.

My thoughts for the long term - this bull market feels different... I do not think it is driven by "natural market forces". The bankers are not ready to give up. EEM DAX and Russell2000 hint that we should see one more leg lower. If we see another correction in Q1 next year the CBs will freak out again and I expect final blow off. Eventually natural forces will win but before that the market should become an "uncontrollable monster". I think we will see even more crazy staff to the upside before it is game over.

Expect veeery interesting 2015..... so enjoy the holidays for the rest of 2014 and prepare for the wild ride next year:)

Update

The bullish scenario is playing out as expected. I think we are close to a short term top. Thanksgiving week and the end of the month so I do not expect some huge drop, but I think it is a good idea to take some profits when you see the next higher high or on Friday.

Weekly review

UPDATE: I have read now that it is Thanksgiving next week(I am in Europe i did not know:) that means the bullish scenario has much higher probability. It was the preferred scenario anyway.
Higher next week, pullback first half of December for a week or two and another move higher until 10-15th of January. Statistic and the charts point to the same outcome.

Short term view - not sure... I have to see what happens on Monday.
Intermediate term view - pullback after a short term top next week and another move higher.

So the central bankers produced a spike on Friday - perfect "natural" move since mid October with only one real red day.
BOC cutting rates, ECB will do what ever it takes, JOB are crazy anyway... Are they scared? When everything is so great why they need to "support" the economy/market all the time?
Usually I do not care about politics,economy etc. but I think the guys behind the curtain are getting nervous... the end game is approaching.

Back to the charts, first the short term - I wrote that I am not sure about the short term because looking at the the DAX and RUSSELL2000 charts I think one last move higher will look much better. They count much better and easier than DJ and SP500 and I will not be surprised if the major indexes print higher high too. Monday should give us the answer.
- the move on Friday looks like exhaustion gap and the spike was met with selling. That is perfect way for an end of the move up since mid October. This is the second chart where the bearish scenario is shown.
- one final spike to finish an impulse... you need an impulse to finish a move. This is the first chart the bullish scenario. I am leaning more toward this scenario, but we need confirmation on Monday.

The intermediate term scenario has not changed - October is behind us and November one week left... I do not think that we will see a major top in December. It sounds more realistic that we see a pullback to relief the overbought conditions/reset indicators and Christmas rally. Worst case even if this is the top, it will be retested before any serious sell off begins.

TECHNICAL PICTURE
Short term - the bullish scenarios one final wave higher to finish the move since since mid October.

The bearish scenario - you want to see the indexes open lower and "sink" like a rock to the support level 2040.

Intermediate term - no change.... waiting for a short term top and how the move lower will look like. Targets for the pullback the previous high and MA50

Long term - the long term picture is unchanged.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - reaction lower after overbought conditions is due. No sell signals so this should be only a pullback.
McClellan Oscillator - divergence lower high.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, but in overbought territory.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - buy signal, but at levels where usually we see a reaction lower.
Fear Indicator VIX - long term divergence.
Advance-Decline Issues - fewer stocks are advancing and the indicator is making lower high.
NYSE New Highs-New Lows - lower high after hitting overbought levels.
Percent of Stocks above MA200 - really a miserable levels for an all time highs.


HURST CYCLES
Day 26 of the current 40 day cycle. I think next week we should see a short term top.

Week 5 of the current 20 week and 40 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 11 of a countdown. One more higher high to finish the countdown will look perfect.

Update

Careful now... we have the expected higher high and it looks like an impulse so it could be the final wave to finish the whole move higher. If it moves back below 2040 I think we will have at least short term reversal.

Weekly review

Short term view - final high and short term top next week.
Intermediate term view - pullback after a short term top and another move higher.

Nothing new, even more boring week than the previous one. Higher high on Monday as expected and than indecision candles four days in a row.... it would not have made a difference if the market were close for four days:)

As I wrote two weeks ago expect 2-3 weeks before a short term top and the market grinding higher playing within the 2030-2040 range. Next week is the third one I hope we will see some move up or down at last.
Market breadth shows weakness and the 40 day cycle looks ripe so the odds look good for a top next week.
The plan has not changed - I expect to see a short term top next week. I think the move lower will be only a pullback for several weeks followed by another move higher. But I will watch carefully the price action witch should not be impulsive and should not show strength.

TECHNICAL PICTURE
Short term - it looks like the SP500 wants to make one final high... but watch out for a reversal candle, maybe a intraday reversal.

Intermediate term - no change.... waiting for a short term top and how the move lower will look like.

Long term - the long term picture is unchanged.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - oscillators are moving lower the whole week and they look tired, the trend following indicators have not changed - swing higher is running.
McClellan Oscillator - moving lower there is no strength any more... short term top around the corner?
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal, but reached overbought territory.
Bullish Percentage - still below 70... not so much strength after such an explosive move.
Percent of Stocks above MA50 - in overbought territory, short term the move is still healthy.
Fear Indicator VIX - plunged but I think we will see another higher low.
Advance-Decline Issues - shows weakness moving lower for two weeks.
Percent of Stocks above MA200 - a lot of bullishness and ATH, but only half of the shares are above MA200. I think we are one step nearer to an important top


HURST CYCLES
Day 21 of the current 40 day cycle. I think next week we should see a short term top.

Week 4 of the current 20 week and 40 week cycle. If the alternate scenario plays out I will switch back to the previous cycle count that we are in the last 20 week cycle of the 18 month cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 8 of a countdown... nothing interesting on the daily or weekly chart.

Weekly review

Short term view - topping to continue.
Intermediate term view - pullback after a short term top and another move higher.

Nothing really interesting this week, as expected small pullback than higher to the 2030-2040 area.

Topping should continue next week. I think we will see more small up and down moves between 2000-2040 before a short term top.
The main plan stays the same - I think we saw strength and any move lower should be just a pullback followed by another higher high. Strength does not reverse just like that.
But we will watch the price action closely and if we see an impulse lower breaking below 1950 we will switch to the alternate scenario - move below 1820.

TECHNICAL PICTURE
Short term - it is difficult to predict the exact path, but I think on Monday the index will move higher than it should turn lower and break below the first minor support 2023-2025 and continue lower to MA50 and later support around 2000.

Intermediate term - nothing really changed this week.... waiting to see after a short term top how the move lower will look like.

Long term - the long term picture is unchanged.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - oscillators look a little bit tired a need a pause, the trend following indicators have no change - swing higher is running.
McClellan Oscillator - after several peeks in overbought territory now refuses to move higher. We have lower high.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - strength above 75, buy signal.
Fear Indicator VIX - crashing lower.... probably the next higher low.
Advance-Decline Issues - lower high too.


HURST CYCLES
Day 16 of the current 40 day cycle. I think next week we should see a short term top.

Week 3 of the current 20 week and 40 week cycle. If the alternate scenario plays out I will switch back to the previous cycle count the we are in the last 20 week cycle of the 18 month cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 6 of a countdown... nothing interesting on the daily or weekly chart.

Update

Everything according to the plan - small pullback and higher to the 2030-2040 area. It looks like the DAX has reversed. SP500 is struggling and has multiple MACD and RSI divergences on the hourly chart. I would put a stop below the last minor low 2025..... but it is your decision:)

Weekly review

Short term view - the indexes should start topping next week.
Intermediate term view - not sure important top in 2-3 weeks or more upside in the next 2 months.

I was expecting to see some pullback and continuation higher... nothing similar just moving vertically higher. That is in fact worse for the bulls. Such moves are not sustainable. I think now the chance is much higher that we are close to an important top... If the correction was like in 2010 or 2011 long enough I would say new longterm move higher has started, but now after two years rally I doubt it. It feels more like August-October 2007.

The two scenarios which I see is a top in the next two weeks or the expanded flat(less and less probable). In both cases I expect the current move to start topping which will last 1-2 weeks. We will sew a new ATH something like 2030-2040 to trap the herd. Than a move lower should follow. In the case of an expanded flat it should be a 3 wave corrective structure and bottom above ~1925 which is support and 50% Fibo.
Cycles are still "young" and market breadth is positive showing strength, so it should take some time 2-3 weeks before any reversal occurs.

TECHNICAL PICTURE
Short term - it should look something like this the short term.... some up and down moves so that the current move decelerate and reverse.

Intermediate term - the histogram(and many other indicators) hit very overbought levels. Usually this is a sign for a strength and than you wait for a second peak and divergence before a move in the opposite direction. Look at the price action and the indicator where I marked it with a green arrow. So even if this is an important top and you are a bear just have patience and wait for a while.

Long term - the long term picture is unchanged.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - is positive and shows strength. Nothing to suggest a reversal at the moment.
McClellan Oscillator - several higher highs in overbought territory. Strength and no signs of a weakness. Cool off expected.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal
Percent of Stocks above MA50 - buy signal, near to the 75 level.
Fear Indicator VIX - moving lower. I expect another higher low after the current move higher is over.
Advance-Decline Issues - in overbought territory. This should be a sign for a strength and not a reversal... rather cool off.
NYSE New Highs-New Lows - sharp reversal and in overbought territory.


HURST CYCLES
Day 11 of the current 40 day cycle.It will take some time before it topes out.

Given the strength there is a high probability that this was a 40 week cycle low. The length is the average expected for this cycle. The unusual is that it consist of three shorter than the average 20 week cycles.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Nothing interesting... the setup was finished as expected. With the very high volatility there is no edge on the daily or weekly chart to use Tom Demark sequential.