A lot of volatility and another corrective a-b-c. It is complete mess corrective waves in both directions and too many possible patterns. With cycles it is not 100% clear either. The two main options are this consolidation and when it is over continuation higher or topping pattern is running. At the moment it is difficult to say with very high probability which one it is. What I think I know:)
- Consolidation - I want to see finished pattern lower with final impulse wave c, 40w cycle low around the end of October, market breadth signaling intermediate term low. There is no such signals and small a-b-c lower does not look enough for me.
- Topping - I want to see finished pattern and reversal with impulse. The zig-zag from September is not enough so at least one more high is missing.
No matter bullish(consolidation) or bearish(topping) both cases do not look complete. At the moment I am just watching no need to guess. I will assume it is consolidation, than we should see another 2-3 weeks lower and a low below the August lows for a finished corrective pattern.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - corrective zig-zag higher in September, this decline is another a-b-c my suspicion was confirmed. I will make a guess - this rocket launch is another corrective zig-zag:))).
If we see test of the high with another zig-zag(c=a red) it will be dangerous for the bulls see the third chart. In this case the bulls must hope this is triangle and not ED.
Intermediate term - lower as expected, but I can not see finished pattern and reversal. to the upside the price is testing resistance/MA50 and the gap was closed. In the case of consolidation another decline should follow to test the lower trend line. 40 week cycle low should be followed by 2-3 months higher and test of the upper trend line.... in this case the 1,38 Fibo level will be hit, which is usual extension for B waves in expanded flat.
For something bearish the lower trend line(shown above) should be broken and at least the March/June lows tested. Here is one bearish pattern... who knows with so many zig-zags. In this case B=1,23xA the other usual extension for expanded flat.
Long term - at the moment I will assume that a correction will be finished in October. Then a rally for 2-3 months followed by final sell off to finish the correction which begun in 2018.
MARKET BREADTH INDICATORS
Market Breadth Indicators - oscillators turned up signaling short term bottom, but no signs for important low.
McClellan Oscillator - slightly oversold and turned higher, close to zero now.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, turned lower from overbought levels.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - turned up in the middle of the range.
Fear Indicator VIX - retracement and one more spike expected.
Advance-Decline Issues - oversold levels has not been reached, now around the middle of the range.
HURST CYCLES
This low is another option for 40 week cycle low - 10 weeks from June to 5th of August and 8 weeks from this August low until this week for 40 week cycle with length 41 weeks. The pattern and market breadth does not really signal an intermediate low, but who knows.
Day 35 another 2-3 weeks needed for finished daily cycle.
Week 18 for the 20 week cycle.
