Update

I am away for 3 weeks again... the next weekly post should be on 15-th of September.


Short term - we saw sharp sell off yesterday, but it takes too long and the retracement is too deep so the probability for wave 2 is very low. Confirmation for a move in the opposite direction is break below 2900 until then the pattern can easily extend higher.
This is hourly chart futures I see impulse and I suspect that w3 of ED is running for the fifth wave.

The big picture has not changed - I see leg lower and corrective move higher.
Intermediate term it looks like the flat is near to competition and another leg lower(red) should start.
What if I am wrong? Than we saw daily cycle low on 15-th of August and much more ugly patterns are running a-b-c(green) and now a of another zig-zag higher(green path).

There is a lot of resistance in the 2940-2960 area so at least we should see a pullback
If you see break below 2900 with impulse it is red, if you see choppy move zig-zag just to close one of the gaps it is the green one.

Weekly preview

Move lower and probable daily cycle low, but the market threw a curve ball:) we have enough to the downside for daily cycle low, but the expected b wave is bigger and it looks like a flat at the moment.

There is an obvious pattern which fits the most indexes, but the market is very creative lately so I am open for surprises how exactly it will play out. It is a day traders environment and if you are not such, just relax, focus on the big picture and wait for the pattern to play out.
The big picture - I do not know the exact pattern from the last two weeks, but I know it is corrective and when it is finished we will see another leg lower. Short term market breadth and the indicators are turning positive plus daily cycle low is expected, which means it is very unlikely that this leg lower has begun.... on top of this you have two bullish weekly candles with long shadows from MA50, the hourly chart do not override the weekly.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the obvious pattern is zig-zag up and zig-zag down with the same size which is flat correction and the next move should be final rally to resistance for b. As I said I am open for surprises like one more lower low for slightly different flat (red a-b-c).

Intermediate term - the price is bouncing between MA50 and MA200. If I am right about the flat, resistance and MA50 will be tested one more time and then the direction should be down until we see 40 week cycle low in October.
The indicators are turning positive so the most bearish outcome which I see is one more lower low(see above), but I do not expect the (c) wave.

Long term - I expect decline in three waves with the first important low in October - a/C/IV and 40 week cycle low.
Two bullish weekly candles in a row bouncing from MA50... this does not fit with another plunge lower more like something higher is expected - this is exactly what the shorter term charts daily/hourly are saying.

MARKET BREADTH INDICATORS
Market Breadth Indicators - signs for short term bottom, but nothing suggests intermediate term low.
McClellan Oscillator - oversold level,divergence and now close to zero - short term bottom expected.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, in oversold territory.
Bullish Percentage - sell signal, in the middle of the range.
Percent of Stocks above MA50 - close to oversold level for second time - probably short term bottom.
Fear Indicator VIX - up and down, it should reset before continuation lower.
Advance-Decline Issues - turned up and in the middle of the range, it has not even reached oversold level so this should be just short term bottom.


HURST CYCLES
Day 1? Last week it was too early for a low and it was not confirmed. Now we have probable daily cycle low at day 52 and waiting for confirmation or final low next week. Price is still below MA10 and RSI below the MA so no confirmation so far.

Week 11 for the 20 week cycle, time for mid-cycle bounce.