MTU Weekend Ed. - Fourth Wave (11/6/15 close)

The new high in NDX (Chart 1) increases the likelihood that the sell-off in Q3 is part of a fourth wave (Chart 2). While the new high in NDX and the strong upside momentum in SP500 hints at new highs in SP500, the notable disparity along the market-cap dimension has persisted (Chart 3). It is likely that the proposed fourth wave is still incomplete.

Near term, if the market is ready to pull back, one can count the decline last week as a leading diagonal triangle. Otherwise, the overlapping nature of the decline suggests a small-degree fourth wave. See Chart 4 and Chart 5.