Interestingly, although the Dow, the Dow Transports, and the Nasdaq 100 Index made new highs this past week, the early July highs held in other benchmark indexes, including the Nasdaq Composite Index. See Topped? (7/11/14).
This near term divergence among benchmark stock indexes suggest the following tracking scenarios. See Chart 1.
[red] Thursday's low (1955.59 in SP500) is the low of an initial leading diagonal triangle from an orthodox high. Friday's deep retrace/rebound is consistent with the nature of an LDT. An immediate rolling over is in order.
[blue] An ABC pullback from the early July high either completed at Thursday's low or is still in progress. Thursday's low is either all of wave C-down or wave [i]-down of wave C-down.
