A potential new low target calculation is shown on the 4 hr ES. A respectable positive divergence is also forming on the MACD so perhaps another retrace up is once again on the cards soon. The 5-wave move down, if completed now as part of an initial phase down after the top flag, would posit a more aggressive start to the overall downward correction process that could be unfolding. Once again, the weekly advance-decline on the NYSE (nyad) finished at -70% and looks ominous going forward. Lets leave it there for now. Have a great weekend..
2/1/20 update..we have re-inserted the alternate lower target from the outside longer leg as that cannot be excluded as a possibility .
2/2/20 .. please see the quick note below this chart we added on a bigger study.
Our bots will flag a "V" when they see a top. (1/25/20 Top Flagged!)
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Lots of chatter from various sources regarding the likelihood of a large degree decline in the market. We like to strip away opinion and look at specific data wherever there is established historical background. A weekly chart of the McClellan Summation Index using 50 ma and 200 ma might give us a clue. The more notable tops often occur when both moving averages are at or below the 2750 value and both moving down. That is not the current situation in the chart so we will be watching the plot to see if they both turn down at some point going forward. There was an approx. 11% drop in July of 2007 prior to the bigger top in October. We are currently at very similar levels to July 2007 so let's see how the current top flag analysis pans out.
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