Potential Right Shoulder & 4th Weekly Breadth Prints Negative

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Update note: The chart comment- "WAVE 5 HIGHER TARGETS BEGIN" is a reference to how far ES futures wave values may have travelled since the low on 3/23/20 (at the ES 3910 zone). This is a minimum point at which the highest degree wave 5 from 3/23/20 low may have hit a length wave5 = length wave1. A price reaction in this zone by itself does not necessarily indicate a larger degree top as the chart notes- an 'e5' is expected which could travel a significant amount higher where we expect a 'TOP' w5 = w1 x fib ext. Only very occasionally does wave5 = wave1 in length so while it is unlikely, it is not impossible and supporting vectors indicate we are getting closer to a 'TOP' where w5 = w1 x fib ext so we need the fib ext to print. 

The diamond target that was hit was 1.27% above 3910.0 at 3960.0 zone and 3910.0 is extremely close to the diamond structure commencing and also it's failure point afterwards which is an interesting observation. This lends more ammunition to the w5 = w1 idea at the 3910 level as a correct statistical analysis since this could produce a notable reaction (pre-topping zone?). Whatever unfolds next could enforce or nix it being wave 5 pre-topping zone. There most likely needs to be several more sessions potentially in a range or new all-time highs where VXX prints it's LOW target. Regardless of where ES is price-wise when VXX hits the low target, we anticipate a market reaction probably down.

Original post:
Regardless of whether there is a right shoulder or not, indications favor a pullback event to form 'd4' as noted. Since 'b2' was a very shallow pullback (just below the bottom of the chart on the left), alternation gives us a shot at a decent size wave 'd4' down. The key to this event is to watch VXX to see when it prints in the 13.66 zone.

Weekly breadth MACD signal on the NYAD has printed it's fourth weekly negative signal at (-)11.6 which is the highest (less negative) value it has printed in the last four consecutive weeks of negative prints and strongly indicates buying enthusiasm at this level that often predicates a top of some size. We still have to see wave 'e5' up in ES futures later on.

SVXY, in it's fractal we proposed in a previous post, could be nearing it's breakout position to generally match with ES futures 'e5' up. Note that the two volatility derivatives VXX and SVXY can and often do move quite independently of each other and the market index. At VectorSpike there is a detailed multi-pattern recognition system that attempts to keep us focused on turning points aligned with these volatility derivatives.

The chart will be subject to adjustment as unfolding conditions dictate.

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