Weekly preview

Short term view - pullback and one more high.
Intermediate term view - waiting for the current move up to be finished, after that another correction which should be the biggest for 2017.

This is the first higher high from the expected two more highs as pointed in the short update two weeks ago. The same analysis - as long as we do not see impulsive reversal below 2480 I expect pullback and one final higher high. Looking at many different indexes this is the scenario with higher probability.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - 7 swings so far and for a finished impulse we need 9 swings. As long as support and MA200 hold I expect test of the break out and another high.

Intermediate term - other indexes like DAX,RUT support the idea to expect one more high with divergences before reversal.

Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is pointing up but building double divergences.

MARKET BREADTH INDICATORS
Market Breadth Indicators - still pointing higher with a buy signal. Weak for indexes making ATHs, but no signs of a reversal which says more time needed to see divergences and turn lower.
McClellan Oscillator - above zero with divergences.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - hanging at the same levels, very weak only 65% of the shares above MA50.
Fear Indicator VIX - extreme complacency again. Historically we see such thing for the first time below 10 for 5 months.


HURST CYCLES
Day 29 of the 40 day cycle. The expected pullback should be 40 day cycle low.

Week 6 of the 20 week cycle. The pullback should be half cycle low week 7 or 8.

Weekly preview

Short term view - more to the upside.
Intermediate term view - waiting for the current move up to be finished probably 2 weeks after that another correction.

Nothing new this week... as long as the price stays above 2480 expect the move higher to continue. At the moment I do not see signs for a reversal.

Intermediate term.... something does not look right. Now when I have looked at the charts closely market breadth is saying the decline in August is not part of the move higher from the April low, it is of different degree. If this is true this is not the top of wave 3 from the Feb.2016. Emerging markets and European indexes support such pattern. Cycles will look better with such more bullish pattern. So now waiting to see how long will it take for the current move to reverse and if subsequent correction stays above the 2400-2420 area.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I do not see finished pattern or signs for a reversal - sideway move and the indicators are resetting.

Intermediate term - I have some doubts that this the top of wave 3 from the Feb.2016 low. The next move lower will tell us what is going on.

Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market.

MARKET BREADTH INDICATORS
Market Breadth Indicators - are pointing higher, but very weak for indexes making new ATH, lower highs again and long term divergences are building.
McClellan Oscillator - above zero waiting for divergence before the indexes turn lower.
McClellan Summation Index - buy signal, pointing higher.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal, but could not move into overbought territory.
Percent of Stocks above MA50 - very weak only 65% of the shares above MA50.
Fear Indicator VIX - a lot of complacency again. I think we will see a divergence.
This chart is showing that the declines from April and August are probably of the same degree. The same are showing other market breadth indicators and the RSI/MACD. It does not make sense wave of such lower degree (iv) of v of 3 to cause such deep move lower and 20 week cycle low.

HURST CYCLES
Day 24 in the middle of the 40 day cycle.

Week 5 of the 20 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have finished sell setup on the daily chart.

Update

At the low in August I wrote that there is nothing so bearish because the move lower is only three waves and there is two options B wave or the last wave up to finish wave 3 on the daily chart. Until my last post two weeks ago wave B was more likely, but after initial reaction from the resistance zone we did not saw follow trough. Now it is obvious that this move is part of wave three.


I think NYSE has the most clean pattern showing five waves for wave 3 and five waves for wave v of 3.

Short term - for example NASDAQ has five waves higher, but NYSE and SPX have overlapping waves and the only way I see for a finished pattern(impulse) is two more highs. As long as the support zone holds I expect to see this two highs. On the chart is shown the NYSE index, but SP500 has the same pattern with support zone 2480-2490.

Update

This weeks and the next two weeks there will be no weekly analysis. If I have time I will post short updates.


SP500 is testing the resistance zone and the trend line as expected. Most of the indexes look more like a-b-c only Nasdaq more like 1-2-3 because the second wave higher is longer, but it could be just C=1,618xA. I think it is wave B, but we need confirmation first
This is a moment when you can not say if the price will break above resistance or reverse lower.... you can try to forecast, but you do not have a guarantee for an outcome with high probability.
With this said I think patience is better than trying to bet on bearish outcome at the moment and the time to be bullish was as I wrote about the short term bottom:). I do not see signs for imminent reversal so it is more likely to see toping for 1-2 days or continuation higher:
- if this is wave B(red) toping should start - boring Friday and most likely a top on Tuesday.
- if this is wave 3(green) in the next two trading days the price should continue moving higher above resistance and challenge the ATH. If SPX can not rally 20 points(wave 3=1,618x1=2490 the previous high) in the next two days this will be a warning sign for the bulls.