Weekly preview

One more decline on Monday to touch the neckline and 38% retracement followed by sharp reversal... as I wrote why should someone short a bottom?
I hope now the non-believers understand what I meant with go long or at least take your profits. If the market wants to make a higher high ride it, if it makes lower high short it again at much higher levels - simple trading plan, low risk, no emotions.

After this vertical move the only pattern which makes sense is that we saw the top in May and the decline begun with a zig-zag... this is a bad news because the pattern to the downside will be difficult to predict and trade.
What is the alternative - if you count this week as the start of an impulse it will be finished in the 3150-3200 area. This is not c/B anymore it will be i/3. I do not see evidence to support such pattern.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two impulses higher with the same size which is corrective and support my view - expecting lower high. The only way to count this an impulse is extended fifth wave - I doubt it.
Do not count it automatically as w1 because of strength. In Feb and late Oct 2018 we saw explosive moves up too, which ended with another decline (see the daily chart).

Intermediate term - I have tried to explain with simple TA why this is a low... many did not want to hear, but it is playing out as expected. History(rectangles) says we should see 3-4 week higher even if the pattern is bearish. The main pattern which I follow for weeks is that we have reversal with a zig-zag(yellow) which means complex pattern to the downside.
The trend line could be tested now only with ending diagonal to burn time June/July.... it is too early to predict such pattern.
The green pattern for impulse higher points to much higher levels and does not make sense any more.

Long term - one more leg lower to finish wave IV from 2009. Expect complex pattern because of time and so far we have only corrective zig-zag lower.

MARKET BREADTH INDICATORS
Market Breadth Indicators - are turning up. Advance-Decline Issues never moved to oversold levels, which is unusual... the indicator says we are still in the middle of a move lower which corresponds to the main EW count a-b-c lower.
McClellan Oscillator - above zero.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - trying to turn up.
Bullish Percentage - turning up.
Percent of Stocks above MA50 - turning up .
Fear Indicator VIX - I want ot see another low in the 13-14 before the next explosion higher.
Advance-Decline Issues - in the middle of the range. It does not give a sign that the move lower is finished - no oversold levels hit. It looks like the bearish EW count zig-zag lower now retracement and final decline to oversold levels.


HURST CYCLES
For bullish right translated 20 week cycle I wanted to see shallow decline for 2-3 weeks. It was much bigger and longer and coupled with probable 40 week cycle high in May(discussed many times) the odds are higher that the next 20 week cycle will make lower high.

Day 4, it looks like the next daily cycle is running.

Week 1... possible 20 week cycle low at week 23.