Update

I suspect that the SP500 is in the middle of a triangle. If I am right expect choppy and boring August unless you are short term trader... nothing different than the previous 8 months:)

It looks like we have 5 waves higher, pullback should follow probably to support 2080-2085. Another leg higher with the same size and SP500 will hit the previous highs 2130-2135. One final pullback from resistance the previous ATHs will finish a triangle.

And this is how it looks like on the daily chart.

Update

The market stretching lower to the maximum, oversold indicators, you are thinking maybe I am wrong... I even took out "the bear suit" from the closet and prepared bearish chart for the DAX(which I am trading) I do not want to get caught with the pants down. And than it reverses with strong move:) I still want to be sure and I want to see a confirmation - higher low, but the bullish scenario looks now more probable.

The chart updated - as I wrote the weekend we should see a bottoming and higher low around FOMC and full moon which usually mark a reversal, this is the bullish case.
With the strong move yesterday which retraced 50% the bearish scenario looks now less probable. The bears really need one more lower low for an impulse or it is just a correction a-b-c with only three waves lower and oversold indicators.
The same for the DAX it should stay above 11000 for only 3 waves lower.

DAX chart update and trading with the moon:)

UPDATE - added the bearish scenario.
Now if the bounce around 11000-11100 is weak and we see another lower low the move lower will look like an impulse which makes the picture more bearish. Than we should see a a retracement which I would like to see staying below 11400 and find resistance at MA50 on the daily chart - if this plays out the chart below is the new road map.
We want to be prepared for a bearish outcome and here is how the bearish scenario look like - the move up since September 2011 finished in May 2015 and huge correction is running already. One leg lower zig-zag W, expanded flat 3-3-5 for X which will explain the impulse higher(which causes the confusion). Now the next zig-zag lower Y is running and in October he DAX should be around 10000... and this should be only the first part of the correction.

Here is the DAX chart updated. The move lower DAX and the US indexes looks scary.... but with impulse higher and 40 weeks low 3 weeks ago I will be very surprised if the top is behind us. The DAX has just reached the target 11100 - the support level(the gap), 61,8% FIbo retracement and the second leg is now 1,618 the size of the first leg lower.
Bullish scenario - at least one more leg higher with the same size for a double top... but I think we will see an impulse higher(the green path)
If we see only a bounce from the support level and the price continue lower below 11000 probably something else is going on.

And here trading with the moon for fun:)... or not!
There is many blogs about trading using the moon, the sun or astrology. Maybe you have already stumbled upon such pages. I am not paying much attention because the tools I use are good enough and no need to make it more complicated. The easiest method is to expect reversal around full moon. I was aware of this and today I have decided to see what happens around full moon - 2014 move higher and 2015 so far sideway move. I would say it works surprisingly good. Add some simple rules for example simple technical analysis sell/buy trigger and trade in the direction of the prevailing trend and you definitely will beat the index and buy and hold tactic.

Very often there is reversal around full moon +-2 days. There is 2-3 times it has not worked so gut, but nothing works 100%. By the way FOMC often marks reversals and on Friday is full moon... so let's see if it will work out again this week.

The numbers in the circles show how many days before or after the top/bottom was full moon.

Weekly preview

Short term view - bottoming expected and after FOMC we will know only short term bounce and lower or the next leg higher.
Intermediate term view - the final move higher is running...

The mess continues now for 8 months. I do not know for you, but I am getting tired from this..... moved nowhere for so long time. At least it was exciting in PM/Miners sector:)
The level which we see is not a surprise, but I thought we will see it next week and not so fast.
I suspect we will see some up and down moves before FOMC and then we hear something bullish or bearish(has that ever happened?) from FED for the next bigger move.
It does not make sense for me to see a top so early in the cycle and market breadth hitting bottom, but if we see 5 waves lower and break below support levels(see the first chart) than down is down... the charts does not look good and the bulls should step in on Monday.

PM/Miners - well, well who would have thought that we can see an intraday reversal yesterday:) I have promised a reader that I will track PM closely. I think it worked great targets and timing an entry. I hope you stayed calm and used the opportunity yesterday. Now waiting to see confirmation - the charts are below.

TECHNICAL PICTURE
Short term - I thought we will see a bounce from MA50 and than turn lower the whole move taking more time... now with the price moving so fast we can not exclude the option for an impulse. Both scenarios are shown green bullish a-b-c and red bearish an impulse. No signs for a bottom I expect a pause before FOMC... and waiting to see what they will deliver.

Intermediate term - no change, we saw the move lower and waiting for confirmation which scenario will play out. My preferred scenario is the green one.

Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - some strange mix at the moment.... some pointing to a bottom from last week, some sell signals again and some oversold.....
McClellan Oscillator - nearing oversold levels.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - we need higher low for the bullish case.
Fear Indicator VIX - long term is clear higher lows, short term no clue...
Advance-Decline Issues - we need higher low for the bullish case.
NYSE New Highs-New Lows - time for a bounce....
Percent of Stocks above MA200 - ugly for a market so close to ATH. Only 38% of shares are above MA200 - broad based weakness....


HURST CYCLES
Day 14... it will be strange to see a top so early at day 10.

Week 2 of the current 20 and 40 weeks cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Currently at day 3...

We need small waves 4 and 5 to confirm an impulse than a corrective pullback as a zig-zag to confirm a bottom. If we see this than we will have a H&S bottoming pattern and the right shoulder is the entry for the rest of your position with a tight and clear defined stop below the last low around 1072.

GDXJ shows the same pattern like gold. Divergences MACD/RSI, waiting for confirmation for an impulse and corrective pullback. MA50 and the last high are resistance where I expect a pullback to begin.

gold/silver update

The minimum conditions were met - panic low -> some bounce -> moving lower to a lower low. With the overnight move gold hit 1072 - my target from the "long term" posts was 1070-1090, silver hit 14,40 which was one of the measurements. At the moment there is no guarantee for example that the big boys will not push the PM to the lower targets like gold 1065 and silver 14,30 followed by intraday reversal. But I think this is the moment for traders which are not afraid of risk to open 20%-30% of their positions.

There is no need for charts just look at the previous post below gold/silver/gdx - we saw the move lower.... let's see if a reversal will follow.

Gold/Silver/GDX

Update for readers interested in PM/miners... I think now it is the time to load quality gold miners for a furious bear market rally.
- Gold - exhaustion bar, a lot of emotions and media coverage, everybody is expert now writing about gold. All this happens close to an important top/bottom not at the beginning of a trend. Everybody is very smart after the fact.
- Silver - not really impressed... working on it's waves.
- Gold miners - real massacre, trading at prices when gold was 300$. This is irrational behavior and qualify for me as "to shit your pants".

What I see - EW patterns close to finishing the moves, cycles at 40 weeks cycles low, indicators and market breadth at extremes, sentiment and short position at extremes. Everything screams to me expect massive short squeeze.
When the rubber band is stretched too much to one side expect snap back, extremes are followed by mean reversion.
I expect a bottom in the next one week and rally - gold 20%-30% / silver 30%-40% / miners 50%-100% for different shares. Some guys argue that this is the bottom for the bear market in PM. I am not in this camp, I think this will be just a bear market rally which is worth trading and if I am wrong even better:)

Now this does not mean go out and catch the falling knife. Sit down an think a little bit and make a plan. Choose what to trade single shares if you have something on your mind or ETF's. Plan your entry - for example 20% in gold miners speculating for a bottom, after a higher low or lower low with divergences another 20% and when we have confirmation the rest. Or wait for gold/silver to drift lower for a higher low or lower low with divergences and enter with 30% and after confirmation the rest. It depends on your personality as a trader.


My target was 1090 +-10 points. It was hit... I suspect gold will start drifting lower to finish it's wave structure, higher low has lower probability at the moment.

Silver is working on it's waves. For me a corrective move is running since November 2014. I am showing a closer look of silver because even with the scary day yesterday it looks like silver follows it's path perfectly and I will use it as a guide when to expect a bottom.
We have following targets - a=c for X at 14,40 | 5/c/X at 14 | 5 of 5/c/X at 14,30

The last few days and the last wave 5/c/X. I am showing the chart because it has perfect measurements. Even with the plunge 3=1,618x1, I had doubts that we will see wave 4 because of the extreme bearish sentiment yesterday, but for a short time silver was green +0.80%. Obviously even with panic ew works fine and the message is one final move lower to finish the corrective structure which begun in January 2015.

Again panic sell off lasts 5-7 days and it is the same on the weekly chart. We have 5 days on the daily chart and 5 weeks on the weekly chart.
Given the price action yesterday and my qualification for it:) I highly doubt it will continue lower for another two weeks.
Another RSI extreme with massive triple divergence on the weekly chart - the odds are very high that we will see sharp rally higher.
I can not say if it will start bottoming 1-2 weeks or just reverse sharply... that is way you need a plan how to build your position.

GOLD/GDXJ

UPDATE: Now we have panic sell off in gold too - even better. Dumping 1,2 billion on Friday and 2,7 billions overnight when no one can react... no it is completely normal trading:))) nothing artificial here.

Stay calm and be patient nothing has changed instead of a diagonal it is a normal impulse.
Follow the trading psychology - scary plunge(sellers shitting their pants), bounce higher(sellers exhausted), another move lower but weaker with divergences(Johnny-come-lately joins the party). This game is repeating all the time.

Here is the chart now watching 1128 for retracement and 1065 as a potential target for a low. Panic sell off usually lasts 5-7 days this was red day 6 in a row and the biggest bar. Long shadow for the candle already, which means the rebound is probably running already.

I have posted chart of the USD as a proxy for gold and said another 1-2 weeks before a bottom. Now if I look closer at GOLD and GDXJ charts, EW and cycles say the same another two weeks probably... so gold bugs have patience:)

Bounce from support level and break lower... this should be weak and hint that there is no more sellers. Alternate the selling is not finished another 2-3 days lower, than it is not a wedge just normal 5 waves.

It looks like a panic sell off to finish wave 3. Now some retracement expected and final move lower which should be weak an prove that sellers are exhausted.

Weekly preview

Short term view - I expect choppy week nothing interesting.
Intermediate term view - the final move higher is running.

On Monday the futures moved lower to 2160 but reversed higher after the news(Greece) and the cash index moved higher to my target 2120-2125. Well obviously cycles and market breadth are working:) showing us the the right path when most of the traders were bearish.

Nothing new since last update I think the indexes will burn time in corrective choppy move for the next 5-10 trading days and we will see a move lower.
I suspect the next low will be around FOMC 29.07.

More interesting is now the precious metals sector - a lot of emotions. If you are precious metals/gold miners trader - the time has come to watch closely for a reversal. The last ingredient which was missing to see fear and panic selling especially miners. The gold bears are out explaining how low the gold will move and how smart they are:) That is exactly what you want to see.
Short positions are at all time highs gold is testing the lows, silver making higher low so far. When you have extreme it is inevitable to see mean reversion - ask a successful options trader:) When a trade is so overcrowded there is no more buyers/sellers and it reverses. Remember EUR/USD - I have posted at the end of February a chart with simple trend line and to expect reversal I supposed no one believed me. Three weeks later the trend line was hit USD reversed and since than is correcting for months - it is the same.
EW patterns,cycles,market breadth, sentiment are pointing to a bottom. It is the same like stocks a week ago - let's see if it works again:))

Here is some info about the extreme short positions and statistic. A lot bla bla he is a gold bug focus on the facts - all time high for short positions, extremes are followed by mean reversion, it lasts 9-10 weeks to unwind short positions(remember what I wrote about cycles - summer rally second half of September?), 15%-20% moves - the last important high around 1320 should be tested.


TECHNICAL PICTURE
Short term - choppy week followed by a sharp move lower for 2-3 days around FOMC. As long as price stays above 2075 support and 61,8% I am bullish.

Intermediate term - main scenario wave 5 of the wedge. Alternate scenario we saw the first corrective leg of a bigger correction and the retracement... I do not believe it, but we always keep an eye on the other camp.

Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - indicators are bullish now. Market breath did an excellent job and warned us that a bottom is coming.
McClellan Oscillator - time for some retracement.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - still weak.
Percent of Stocks above MA50 - back to the middle of the range, after oversold levels.
Fear Indicator VIX - plunging lower...
Advance-Decline Issues - moving higher after oversold levels hit.


HURST CYCLES
Day 9 of the current 40/80 days cycles.

The new 20/40 weeks cycle is running.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
On the weekly chart the setup was aborted and we have price flip which does not support the bearish scenario.
On the daily chart we have a setup at day 6.

USD\GOLD intermediate term

UPDATE: alternate USD it is not a zigzag instead a triangle is running. The difference is the bottom is not 1-2 weeks away but rather a few days.
Silver looks more and more like impulse higher and correction lower on the hourly chart, gold in EUR looks like a bottom is in too.



I have been asked if gold have already bottomed... I think we are very close. I was looking for a clues from the USD charts.

EW - USD short term is not so clear, but the forecast from the post "Long term update" seems to play out so far. If this is the case we should see DXY move to around 98,50 and gold a little bit lower both finishing the smaller zig-zags. Than move lower for DXY should begun and summer rally for gold both finishing the bigger zig-zags.
Cycles - DXY week 9 of the 20 week cycle another week or two to top and start moving lower with expected bottom second half of September. Gold week 18 of the 20 week cycle close to a bottom... 8-10 weeks higher from the next 20 week cycle points to a top second half of September.

Now waiting patiently to see a sign for a reversal. Most gold bulls/bears already freaking out... we are at support it will be broken plunge lower.... great this is exactly what you want to see.
Visual below....

Update

I was wrong about the short term. The news from this morning about Greece changed the short term path... the bigger picture stays the same.

As long as the price is above 2085 the bullish scenario is in play. We are currently in wave 3. After up and down to finish iv/v of 3 and 4 wave 5 should follow to around 2120-2125 at the trend line.
I do not believe in the bearish case, but who knows... if the Greece deal falls apart. If the price could not reached the trend line and break below 2085 again than it is just an a-b-c corrective move.

Closer look of the squiggles how an impulse should look like. When wave 3 is finished if the price stays above 2085 we have an impulse and 5 should follow. If the price moves below 2085 it is just an a-b-c.

Weekly preview

Short term view - I think the week will begin with a move lower and than the price will reverse higher.
Intermediate term view - I expect final move higher before a significant correction.

Ok move lower to the 2040 support area as expected and since than the price is playing ping pong between support 2040 and resistance 2085. The low was on Tuesday as I wrote the update, but since than we have such erratic moves... I doubt someone can predict them. Nevertheless when I look at the other markets like DJT/Europe I think we have an intermediate term bottom. I will be very very surprised to see a move bellow 2040.... something unexpected should happen.

Short term - as long as the prices are moving between 2040-2085 we have no confirmation in which direction the price will move. I think it will be higher but first we will see a move lower making higher low, which should be a good buying opportunity. The low for the correction since May should be behind us and you have a clear stop level which is not so wide.
Intermediate term - if I am right about cycles and EW the prices should move higher for the rest of the summer and in September we will watch for signs of a top.

In Europe the indexes finished a zig-zag and we have impulse higher exactly as predicted despite fear about Greece - exactly what you want to see at the end of a correction fear. Market breadth smells more and more like a bottom - we have fear and divergences. Cycles - 40 weeks cycle low(or even 18 month). EW 100% corrective structures both US and European indexes, which means May was not a major top.
The only bearish thing I can see is that this is the first leg of a bigger corrective structure and will see lower highs something like DAX 12000 and SP500 2120.

TECHNICAL PICTURE
Short term - It looks like a H&S to me... expecting the right shoulder. This will be a tradable low with narrow stop.

Intermediate term - main scenario wave 5 of the wedge, alternate scenario we saw the first corrective leg of a bigger correction expect lower high around 2120.

Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - now we have extremes(fear) and divergences... smells more and more like a bottom to me.
McClellan Oscillator - above zero and diveregence
McClellan Summation Index - sell signal
Weekly Stochastic of the Summation Index - sell signal in oversold territory for weeks. I am expecting the next move higher.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - reached a level where corrections usually end and divergence.
Fear Indicator VIX - we saw fear and levels where corrections usually end. Expecting to move lower and make higher low for a divergence when we hit important high.
Advance-Decline Issues - touched the oversold level and reversed.
Put/Call ratio - the lowest level in the last three years... fear in the markets:)
NYSE New Highs-New Lows - oversold levels and divergence.


HURST CYCLES
I think the cycle of higher degree lasted longer and have one extra daily cycle.

The 40 weeks cycle lasted longer, but nothing extreme. Expecting to see a confirmation for a cycle low next week.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
On the daily chart we have price flip and the setup was aborted - another signs that the move is not an impulse. On the weekly chart the setup is still alive and there is high probability that we will see 8 next week.

Update

UPDATE - it played out perfect... bravo mister market:) The final push lower was missing now we have it - SP500 cash index lower low 2044 , sharp reversal to print bullish candle and divergences on different indicators. 37 points rally is strong enough for me. I think move higher has begun.



DJ made lower low and fulfilled the condition for 5 waves to finish c/4. SP500 cash index did not make lower low... but my SP500 CFD charts are showing me low at 2041 one point higher than the target I wanted to see.... I do not know how to interpret this situation finished move or not:)
Four days later no lower close than the huge bar. I would say 99% this is exhaustion bar which marks the end of a trend and not one marking the beginning of a new trend.
European and US indexes hitting MA200 on the daily chart, European indexes met their targets which I am showing for a while...

If we see a big green candle today this will be a confirmation that the correction is over. Alternate scenario is some kind of a flat is running for iv of c/4. SP500 will move higher to 2085-2090 and move lower to finish the correction.

CAC40 perfect measurement and followed exactly the path which I am showing for two weeks.

DAX only 0,681 for the last zigzag.

Weekly preview

Short term view - the move lower is not finished.
Intermediate term view - I expect final move higher before a significant correction.

I was expecting move lower to the 2065 area - we have it.... ok 7 points lower, but that is not the problem. The problem is the way the indexes moved lower, now there is a room for interpretation and we can not exclude the option that the top is behind us. Personally I do not believe it, but we should stick to the charts. Both US and European indexes, the move lower does not look finished and with the Greece referendum this weekend you do not want to be long.

You can interpret charts in different ways and justify both bullish and bearish scenario:
- Technical indicators look bearish, as long as the price is below 2090 the direction is down.
- EW - you can count 1-2-3 or a-b-c, you can not bet for sure on the bullish or bearish case.
- Cycles - the next low should be 40 weeks cycle low or the new 40 weeks cycle has topped out very early which is very bearish this second options looks strange to me but not impossible.....
- Market Breadth is bullish (intermediate term). The indicators are saying correction is running for weeks and we are seeing it's final stage. The problem is when there is fear in the market(the Greek drama) you do not want to rely on market breadth. It can become from oversold to crazy oversold. Fear is irrational emotion there is no logic.
- TomDemark Sequential - have shown signs of life:) setups running on the daily and weekly chart so the move lower has some strength.

I wrote that I still have some doubts - market breadth is bullish for me and when I look at European indexes and DJT I see overlapping corrective structures near completion currently at week 38 which is suggesting and intermediate term low and 40 weeks cycle low (see the last charts).
Plus we have a huge bar and three days later we still do not have follow trough and a new low. This is very strange for a wave 3 of 3 which is the strongest. It feels more like wave C of an A-B-C - maximum fear near to the end of a move. So I expect another move higher.

TECHNICAL PICTURE
Short term - the move lower is not finished. One wave lower is missing, no divergences. Bearish scenario - we are still in wave 3 lower to support 2040 small bounces and lower again. Bullish scenario wave C one more wave lower to support 2040 to finish the the corrective move since May.

Intermediate term - both scenarios bearish and bullish. Now the ED/wedge looks much clearer.

Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - no buy signal, but at levels where usually we see the end of a correction.
McClellan Oscillator - expecting higher low and divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, but oversold - waiting for a bottom.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - wedging too... close to levels where usually corrections are finishing.
Fear Indicator VIX - broke higher expecting higher low and divergence.
Advance-Decline Issues - higher low so far... you would expect to see it plunging with the huge bar lower from Monday.


HURST CYCLES
Waiting to see which scenario will play out and adjust the cycles.

Waiting to see which scenario will play out and adjust the cycles.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Setup at 7. If we do no see a new low on Monday will be a very important hint that we see only a correction.

Setup at 6... let's see if the bears have the strength to finish it.

It looks like a triangle and wedge to me - corrective structure. Even the bearish case - wave C is in fact wave 1, expect at least deep retracement to resistance and MA200.

Corrective structure... expecting another push lower to finish zig zag Z and the whole zig-zag from the top.