$SPY Intraday Update

The previous “nested” count idea (here) has lost credibility here as today’s weakness has unfolded. I will discuss an alternative here.

The inverse remains intact, and we are retesting the neckline again (we did briefly yesterday as well). We may interpret the advance off the 5/12 low as a leading diagonal for minor (green) 1 and today is minor (green) 2. In a way, this is more bullish than the previous nest, because it increases the total height of green 1. And so that generates a higher target for minor (green) 3. I think we will likely still reach the inverse target, but we may surpass that and go closer to $440 once the next wave commences.

SPY

$VVIX is at 103, remarkably low, indicating a near total lack of appetite for institutional hedging here and has broken a long-term trend line. It may foreshadow a volatility regime change, a long period of increasingly lower institutional hedging.

VVIX


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