Weekly preview

One more low completed the pattern and retracement is running. MCO and RSI with double divergences and those expecting much lower are disappointed as expected.

Many are trying to count this as w4... this weekly candle does not look like the weakest wave to me. At the moment I think we have correction higher, which should take time another 3-4 weeks. For the big picture I have a suspicion that we have a combination this wave up could be X, but for that I want to see 62% retracement exceeded.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see a wedge and a break out higher. RSI broke the trend line and we need a pullback to establish the new trend line.
The move lower counts better as a-b-c and not as an impulse. To the upside - the cash index is not so clear, but the futures are showing impulse so we should see more to the upside after a pullback. It should be some pattern, which takes time. The retracement has just begun so the path shown below is speculation at the moment.
As long as the red line is not crossed this move up is not in danger.

Intermediate term - RSI with double divergence and we have move up. I think it should take another 3-4 weeks for 20w cycle high. 2900 looks like a good target to close the gaps and to test MA200, resistance and 62% retracement.

Long term - some already counting completed correction(expanded flat) other trying to fit impulse lower(the bull market is over). I do not think that it is so simple. In a few weeks we will know more. Some EW thoughts:
- if the correction is over with a flat we should see impulse higher. Than this should be i/1/V... too big too fast for my taste - suspicious.
- the bull market is over - then we should see impulse lower. If this is 1 for five weeks than around the end of the year SP500 will be at 500 - unrealistic. Realistic is "a" and the next one big zig-zag below.
- big zig-zag from Feb.2020 is running and it is so bad - than this is b and should hit 50% retracement and stay below the 62% or zig-zag will be negated. There is no such pattern expanding W-X-Y so suspicious. No, it is not expanding triangle either.
- the retracement takes longer and reaches 62% Fibo level or exceeds it - probably X wave and we have combination flat+X+corrective pattern. For NDX and SP500 big triangle could be an option, but for other indexes it will not work so well.

Too much theory from trading perspective just wait for the important cycle low - higher low or lower low with divergence. This will be the low risk trade.

MARKET BREADTH INDICATORS
Market Breadth Indicators - some are showing strength so this move up should not be just three days wonder quickly reversed.
McClellan Oscillator - reached slightly overbought level after divergence.
McClellan Summation Index - trying to turn up.
Weekly Stochastic of the Summation Index - sell signal, trying to turn up.
Bullish Percentage - sharp move higher, reached 70 with a buy signal.
Percent of Stocks above MA50 - trying to turn up, it will take time MA50 is far away.
Fear Indicator VIX - elevated levels. I think it should drop more before we see another surge higher.
Advance-Decline Issues - sharp move up.


HURST CYCLES
Daily(trading) cycle - buy signal was triggered, the price and RSI broke above the MA. The first trend line was broken, probably pullback and break above the second one. The next move lower should be corrective and it is a buy.
Do not forget - this trigger is nothing more than flip switch buy/sell. You have to put it in the context of the price action and the expected price action is corrective higher for a few weeks. If you are not comfortable with that ignore it.
Overall 35 days is a good length for the daily cycle and I think the next one is running.

Hurst cycles - adjusted the sine waves to fit the price action. I think we have 10w cycle low and next we should see several weeks higher for 20w cycle high.

Week 8 for the 20w cycle. Strong move up - most likely we have 10w cycle low.