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Advanced Technical Analysis



Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

Thursday's prices did in fact turn lower from Wednesday's peaks but at this stage it remains unclear if the move down in the SPX and INDU are yet impulsive (and thus signaling a more bearish interpretation over the next few days/weeks. In the bears' favor is the fact that the Nasdaq, the SOX, the NYSE index, and the Russell 2000 declines on Thursday do look (for now) impulsive to the downside (trend changing) and it has been those higher beta indices that have been leaders to the downside (both in timing and magnitude) since the beginning of the year.

It is possible of course that the SPX and INDU make new highs above those of January 19th, do so in a corrective fashion (3 waves or a combination of three waves), and then fall in line with the more bearish other indices out there. But we'll simply have to wait for that setup to present itself if it's going to happen.

For now the short term can go either way for the SPX and INDU: today's employment report may act as the catalyst for a sharp move down (confirming the other indices) or it may act to spike the SPX and INDU above their peaks from the 19th (while the other indices continue to 'correct' higher sub dividing into higher Fibonacci resistances). We'll simply have to wait for price to tell us. Though again, we would note the divergences at Wednesday's peaks in breadth, ticks, and momentum as well as several indices having hourly DeMark trend exhaustion signals present over the last two sessions.

Our bearish view remains the same with a move through the peaks from the 19th negating this interpretation and forcing us to stand aside. If we get a move down that re-confirms the larger bearish call, there should be plenty of downside to play with bearish confirmation (not advice).

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