Update

I am busy in the next 10 days and I do not have time to post.


Short term it looks like SP500 wants to challenge the lower resistance level and Fibo 50% retracement around 1975 (futures almost touched it). Alternate scenario we have an expanded flat and this is wave b finishing today with a steep decline to follow to around 1880 to finish the correction. In both cases the next bigger move should be lower.
I think the beginning of March will be negative we have ECB meeting on 10.03 and FOMC on 16.03. After that the indexes should turn up and end March green. It is unrealistic to expect the price to continue higher so steep we have already 150 points from the bottom, on the other side this move should reset the bearish sentiment after a correction for almost nine months and it is unrealistic to expect to last only two weeks.

Here is again the monthly chart - at the beginning of February I have compared the price action with the previous two bear markets and I wrote that it is not time to be bearish and to expect test of the low and than to see the prices higher. The price continue to follow the same path as in 2000 and 2008 and if this continue in March we should see green monthly candle.

Weekly preview

Short term view - pullback next week
Intermediate term view - higher for several weeks

We saw a green week and now we have a confirmation for a bottom. We have strong move from the bottom it looks like impulse so the move higher should not be over.

Nothing really new to analyze, I think we should see a move higher for weeks to reset the bearish sentiment. We will just follow the market and than see if it is only corrective or to expect new ATH.


TECHNICAL PICTURE
Short term - I think the week will start higher, but than the price should turn lower for a pullback.

Intermediate term - we have a wave higher close to the previous high and MA50 now expecting a pullback. I hope we will see a decent pullback for a nice entry not like in October 2015 just higher.

Long term - we saw a follow through this week and it looks like a confirmation for a double bottom. The oscillators showing divergences and I expect a move higher for weeks.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - are moving higher after divergences last week.
McClellan Oscillator - showed strength reached slightly overbought levels.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - buy signal.
Fear Indicator VIX - moving lower after divergences.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
I think we saw an intermediate term bottom... 40 week cycle low and this is week 1 of the next cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Price flip higher on the weekly chart, setup at 5 on the daily chart... so far we have a confirmation for a bullish price action.

Update

I think the first wave higher is finishing. We have impulse so after a pullback we should see another move higher. Looking at the support and fibo levels the gap around 1870 looks like the most probable target for the pullback.

Precious metals/Gold miners

I was expecting the end of the bear market... it came a few weeks earlier, but we have now important low and strong move higher. Is the bear market over?

Some thoughts:
- from technical perspective we have finished patterns, strong rally and impulse higher.
- it is a fear trade - traders fleeing into bonds and gold. It is obviously important what stocks are doing.
- sentiment - do not like it at all for a major bottom. We did not saw fear and panic selling, everybody is bullish. If you look at pages like safehaven.com or marketoracle.co.uk 2/3 of the articles are about gold and the great bull market which begun. On the opposite side are stocks everybody are bearish talking about the great bear market which is running. How many times has the herd nailed bull market top and bear market low?
- the cycle guys posted interesting ideas - to sum up they think it will last one more 18 month cycle before a bull market gain traction. The Hurst guys think there is one more 18 year cycle lower before we see the final bottom. This idea is very interesting gold crawling lower for 1-2 years, the traders loosing interest and than the bull market really starts

To summarize what I see - finished patterns and impulse higher, vertical move driven by fear(not sustainable), no fear and very bullish sentiment at major bear market low?(very suspicious)

Based on this observations I think it is more likely that we saw the bottom for the bear market, but the precious metals will move slowly lower for a 12-18 months and when we see a top in stocks the gold bull will really blast off higher.

A lot of bla bla how to trade it - stocks should move higher into March-April and I expect precious metals/gold miners to correct lower in this period 50%-61,8% to "digest" the vertical move higher. We are watching closely if stocks make only three waves higher and gold moves lower with corrective three waves. If this is the case buy the low and we see what happens. If the bull has begun we will have an entry close to bottom, if not we will see some small gains. Not a bad risk reward.

We saw that it is about fear and money flows. Money moving from stocks to precious metals and bonds because of fear.
So here is what I see for stocks from cycle perspective - it is called mid-channel pause and when you sum up the cycles of different degrees you have a mirror image and the top has M shape(something like double top).
The low for the first 4 year cycle(the circle on the left) caused only a pause in the uptrend which means the cycles of bigger degree are dominant and we saw the indexes continue higher. Now we are waiting for the bottom of the second 4 year cycle and the 9 year nominal cycle. Than the second 9 year cycle should make another top for this M shape and we should see mirror image for the 18 year cycle.
Looking it from EW perspective the pattern so far hints that this top should be higher than the previous one or we are in wave 4 and wave 5 is expected.

And here is how gold should look like if the idea for this inter market analysis is right - this second top from the M pattern in stocks should cause a test of the bottom for gold before the bull market really takes off. The option I see for a lower low is if stocks finish the bull market with a bubble move higher and sentiment swings to extremes - stocks will never fall and gold is junk.

GDXJ intermediate term - we have impulse higher. If you see only corrective three waves lower to the support zone and Fibo levels than it is a buy.

P.S. We should see another leg higher for NATGAS - impulse higher and corrective a-b-c lower at 40 day cycle low. Great pattern for an intermediate term trade.

Weekly preview

Short term view - small pullback and higher.
Intermediate term view - now after the low has been tested we should see a move higher for 2 months.

The indexes opened with a gap lower on Monday, hinting what to expect - we saw 5 waves lower with lower low and divergences. Now the low has been tested, we have 5 waves lower from the November high, divergences on the weekly charts, market breadth with divergences, climax moves and reversals on other "risk off" markets bonds,precious metals,usd/jpy. Everything points to intermediate term low and a move higher for 6-8 weeks. Only a confirmation is missing - strong bullish week.

Again the two options I see - an a-b-c has finished and move to new ATH, or more complex correction move to around 2000 in the several weeks followed by another move lower for a few months. I think it is the second options, but let's see the move higher first.


TECHNICAL PICTURE
Short term - I think we will see the indexes higher next week.

Intermediate term - the two options just an a-b-c to reset the bearish sentiment or a rally to a new ATH. For the next several weeks the direction is higher and we will see how the move develops.

Long term - no change another bullish candle after retest of the bottom and MA200.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - we have divergences the indicators made higher lows when the indexes made lower low. This is a sign that we have an intermediate term low.
McClellan Oscillator - positive divergence.
McClellan Summation Index - still sell signal, but positive divergence.
Weekly Stochastic of the Summation Index - buy signal, new swing higher should begin.
Bullish Percentage - positive divergence.
Percent of Stocks above MA50 - positive divergence.
Fear Indicator VIX - positive divergence.
Advance-Decline Issues - positive divergence.


HURST CYCLES
The usual length of the 20 week cycle is 14-16 weeks and this was week 13. I think this is the low for the 20 and 40 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
On the daily chart we have a price flip and on the weekly finished buy setup but waiting for a price flip.

So far the move develops as expected comparing it with the other "plunges". Panic low with bullish candle followed by a test of the low and another bullish candle. All we need now is another bullish week for a confirmation.

Update

We have a new low and enough waves in place to call a bottom. Many markets forex,bonds,precious metals with moves which look like a buying climax... If we see a strong green day this is the bottom.

The more "bearish" option (shown on the chart) this is still wave iv of 5 and there is one more move lower - Fibo target 1796.
I would not be surprised to see this scenario. The big boys do not play fair:) and usually the reversals happen over the weekend. So grinding lower whole day and you are wondering "Should I buy or not, I do not want to be caught with a gap in the opposite direction over the weekend".

Commenting about scenarios and MA... Here is visual the chart looks perfect - channel, Fibo, resistance levels, MA50 and MA200 retest. This is my preferred scenario for 2016. If the price moves above 2050 we will switch to the bullish scenario new ATH.

Update

The move lower is not finished which is not a surprise and with this 50 points lower it counts better as wave 5 from the top in November. In fact if you are a bull you want to see a lower low this is much more bullish.
The indexes look different. NYSE and DJIA well above the low, SP500 close to the low, Nasdaq and Russell2000 made a new low already. We have so far 3 waves lower from the top last week so waiting to see a finished pattern and reversal.

The same story with the so called "risk off" trades - EUR/USD traded in the range 1,12-1,13, today USD/JPY traded in the middle of the range 114-115, TLT is in wave c of a huge a-b-c which begun in July 2015(see long term post). So we are waiting to see finished patterns and reversals for this trades too. Based on this I am expecting an important low for the stock indexes.

Weekly preview

Short term view - difficult to say another choppy week
Intermediate term view - choppy 2-3 weeks and higher in March.

Weak start of the week and than lower as expected. We still do not have a clear answer what is going on.
The obvious answer is wave 5 lower has begun... I am not convinced that it is so easy. My preferred scenario stays the same that we will see a choppy February with retest of the low. I do not think that we have impulse lower or that this week was the expected test of the low. So I expect more up and down. See my previous post too - when we see the forex markets reversing than we will see strong move higher.


TECHNICAL PICTURE
Short term - like previous week it is better to wait and see what happens on Monday. If the bearish scenario wave 5(red) is playing out we should see gap lower and another 30-40 points lower. If not than it is the expected choppy move up and down.

Intermediate term - the same on the daily chart. I expect the indicators to turn lower with higher low before reversing higher. This means 2-3 weeks pressure to the down side. Than what ever we see higher or lower low is a buy for a move higher for several weeks at least.

Long term - no change. After the plunge based on history I wrote to expect side way move for several weeks. This is week 3 so another 2-3 weeks and it will look like the previous corrections.

MARKET BREADTH INDICATORS
The Market Breadth Indicators - moved higher from extreme oversold levels. I expect higher lows with divergences even if the indexes make lower low.
McClellan Oscillator - it looks like it wants to move lower.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - higher low expected.
Percent of Stocks above MA50 - higher low expected.
Fear Indicator VIX - lower high expected.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 12 of the current 40 day cycle.

I think this is week 3 of a new 20 week cycle.

Update

Is it the move lower finished...? Not an easy call, I think a few more days lower.

I have watched the charts a lot after the crazy day yesterday, forex markets not stocks.... take a step back and look at the big picture - I would say nothing has changed. What I mean - if you remember I wrote EUR/USD should move higher(DXY lower) in an a-b-c move and that is exactly what happened after two months in a triangle we saw sudden burst higher for the EUR/USD. Everything as expected, USD lower, stocks lower, commodities higher - moves against the long term trends for several months.
When EUR/USD moves higher the DAX moves lower and when USD/JPY moves lower stocks move lower risk off. When this two forex pairs finish their intermediate term moves we should see the trends to reverse for several months - USD and stocks higher and commodities lower (THIS SHOULD BE TRADEABLE LOW long term reversal for commodities).

USD/JPY one final low to 114-115 expected. EUR/USD broke out of its range and we are now in wave "c" from a-b-c which begun in early December. Target is 1,12-1,13, waves 4 and 5 missing to finish C. The DAX is missing one final move for v of 5 to finish the whole move lower which begun in early December. Look at the turn dates for EUR/USD USD/JPY and compare them with DAX and SPX what a coincidence:).

Based on this thoughts and observations I think we are close to an important low(for US it could be higher low), but not there yet a few more days. If I am wrong this intermediate term trend changes which I wrote about above are happening now yesterday/today/tomorrow.

Reaction from the support level yesterday. My conclusion looking at the other markets is that we are not finished to the downside. As long as it stays below 1947 and we do not see a reversal for USD/JPY the direction is lower.

One final move to finish the whole correction since the end of November early December.

It looks to me like series of corrective moves a-b-c with one final "c" lower two finish a choppy zig-zag from the top.

Waves 4 and 5 to finish C with A=C around 1,12-1,13.

Update

SP500 squeezed 7 points higher and touched MA200. Now we have another 5 waves higher and the move looks like a-b-c so I expect a move lower to begin soon.