Weekly preview

Heavy sell off in the tech sector and deeper retracement. Not a big surprise if you look at the previous corrections. As I wrote simple statistic 5-6 weeks sell off with most of the loses in 2 weeks then 2 weeks sharp rally followed by 2 weeks to test the low... nothing new under the sun.
With or without new lows the signs are for a low - cycles, market breadth, seasonality and a rally for 2-3 months is expected.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - one more low around 2600 next week for perfect Fibo measurements - 5 to finish c and c=a. I expect to see the green scenario.
What if I am wrong - if we do not see impulsive move above 2700 than the probability is very high that something else is going on.... probably bigger double zig-zag with another cluster of Fibo targets around 2500. This is the red scenario... I do not believe it will hapen, but you want to be prepared.

Intermediate term - expecting a low and move higher for months, then we will see if it is X or double zig-zag for 3 of ED.

Long term - the histogram with second very deep trough lower than 2016(8 year cycle low) and 2011(21% correction) only in 2008 it was lower. It will take months to reset, then expect the next big sell off.

MARKET BREADTH INDICATORS
Market Breadth Indicators - turned lower, even if we see lower low we will have divergences.
McClellan Oscillator - retraced lower mildly oversold and trying to turn up.
McClellan Summation Index - turned lower.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - turned lower near the oversold level.
Fear Indicator VIX - another lower high...
Advance-Decline Issues - near the oversold level.


HURST CYCLES
Day 18 at least short term low i expected.

Week 4 if we see lower low probably we have to extend the 18 month cycle with 4 weeks.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have a third sell off and for the third time we do not have finished setup, the bears can not show enough strength.

Weekly preview

Leg lower and confirmed corrective a-b-c to the upside as expected. The current move to the downside does not look finished, looking at the indicators and market breadth I do not see signs for a low either. The most likely scenario is to see one more leg lower and this will be the expected test of the low. It is deeper than expected already so the more likely scenario for the big picture is wave X testing the January high or slightly above. For an ED the bulls will need now double zig-zag like April-September, not impossible but you can not bet on complex corrective pattern at such early stage.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - we have extended fifth wave which makes the pattern look like a-b-c, but if you look at NYSE and DJ impulse lower counts better. As I wrote the pattern does not look finished so I expect one more leg lower.

Intermediate term - the both scenarios shown - X wave in red and ED in green. With the deeper retracement X looks more likely, for ED the bulls have a lot of work to do. Double zig-zag to reach the upper trend line looks more likely than big wave c 1,5-1,6 the size of a.

Long term - most likely December/January higher and waiting for the next top for more clear pattern.

MARKET BREADTH INDICATORS
Market Breadth Indicators - look positive to me...
McClellan Oscillator - retracing lower after very overbought level.
McClellan Summation Index - buy signal.
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 - moving lower....
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 14 fro the 40 day cycle, half cycle low expected with the next low.

Week 3 for the 20 week cycle.