Technical indicators confirm rally wave crest - so how to play defense in equities markets now?

The equities markets started reversal patterns at the Fibonacci levels that I've been pointing out for a week or so, in Nasdaq 100, Dow Industrials and Dow Transports. This went along with the banking index looking like it stalled out at similar levels that I charted out and posted here too. Now technical indicators are confirming a wave crest, such as the McClellan charts for NYSE and Nasdaq (below). It was only a couple of days ago I posted those charts pointing out they were looking overbought. Now the Oscillator has indeed fallen under the zero line. So how to play from the defensive side (selling)? We'll go into more detail this weekend about the probabilities for depth of pullback and what investors and traders might expect. For now, I can recommend that anyone selling or shorting should take the usual precautions just in case the market decides to make me look foolish and head straight up - that's just normal precautionary comment though. The greater risk is to remain long the equities markets while we analyze what level of a pullback to expect, or even testing new lows.

We know that Tony Caldaro is looking for the top of a wave A to have finished, that will point to a wave B pullback and then another rally leg up as a wave C. I'm oversimplifying a bit, but it's a view we need to remain aware of. Then, Andre Gratian has been referring to the prospects of the rally being part of a wave 4 that will point to a wave 5 down.

For myself, I've been pointing out the possibility that the rally might have finished a wave 4 and I don't want to get entangled in the Elliott Wave intricacies right now. My concern is that we don't see a pullback, but something more bearish for the weeks ahead that points to new lows. I was interested to see Chris Carolan's "solunar" calendar that I posted here recently that looks rather like what Ellioticians call a "diagonal triangle". If that is the way it plays out, it will be difficult to trade well without good timing. So we'll certainly do our best, no matter how it plays out. The actionary down waves in a pattern like that can be relatively steep, which would mean that methods that take advantage of sharp moves can work well with the right timing. The "problem" is that the pullbacks upward can also be sharp and make the whole expereience feel choppy. So the ability to avoid trading in times of uncertainty, and to switch position if the market starts moving against you, can make a big difference if this is indeed the pattern that manifests.

For those who don't like to move quickly in and out, it may be prudent just to exit into cash, or take a defensive position with simple ETF's (not necessarily the double or triple type) and let it ride unless and until the market moves above last week's levels (or the market makes what is very obviously an important low, or a technical sign such as the McClellan Oscillator moving back above the zero line).

Meantime, one of the analysts I like to keep up with, suggests that bonds may have put in a low. So I'll have to go back and check out how bonds are looking on the charts. For now - I mentioned recently that bonds did that bounce up, and to be alert if they exceeded the prior swing lows (levels shown in that post). That would confirm if this analyst is right - and we'll look into it more this weekend.

I don't see a ChartsEdge map this morning, for today, but I do see some interesting commentary on economics so can recommend those. First is a Jack Welch interview on CNBC's Squawk Box that I watched this morning. I tried to find the url link there but just found this headline, which might be interesting too:
Dr. Doom: Capitalism Could Fail Like Communism - The market must be allowed to work or the US 'will go bust' and capitalism will collapse, renowned bear Marc Faber told CNBC.

Here are the Nasdaq and NYSE McClellan charts: