Intermediate term view - the price action looks like a triangle to me, waiting for the low of wave 4 from Feb.2016 bottom.
We had the corrective leg lower as expected, but it is developing too fast which raises the odds for a bullish triangle. With another corrective leg this week the odds that we have a triangle are even higher and it is difficult to see other decent pattern. The challenge now is to find the bottom of the triangle. The price action from Friday raises the odds for wave 4/5 and impulse from the last low, which means the white triangle(see below). We can only wait and see what happens on Monday. No need to make a decision.
Alternate options are bearish triangle and bearish 1-2 i-ii.... not really favorable at the moment. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I see two variations of a triangle.... at the moment the white one is slightly more favorable because of potential wave 4 from Friday.
Intermediate term - waiting for a finished triangle and the final wave V. The price is still trapped between MA50 and MA200 and we have indecision. I think we will see a bullish outcome and steep rally - thrust from a triangle because of short covering.
Long term - expecting one final rally. The histogram comparison continue to work. We have sideway price action for 5 weeks and now only the final piece is missing sell off and weekly reversal with bullish candle.
MARKET BREADTH INDICATORS
Market Breadth Indicators - slightly positive... nothing interesting, I suppose we will see higher lows when the triangle is finished and we have intermediate term low.
McClellan Oscillator - at the zero line.
McClellan Summation Index - neutral.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - hovering around 15.
Advance-Decline Issues - in the middle of the range, lower high, one more sell off and test of the oversold level will look good.
HURST CYCLES
Day 19 of the 40 day cycle. Most likely we saw mid cycle low and bounce from it. I can not say if the cycle will make higher or lower high.
Week 11 and heading for 40 week cycle low with the low for wave E of the triangle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 6 of a buy setup.... just 0,3 points shy to be negated. Most likely this will happen on Monday unless we see 40 points drop. The bears are not convincing either... normal for a triangle.
