Morning Note on $SPX

So far at least, i have not had to be concerned about the bullish case (here). I want to add a statistic that would support such an outcome IF we breach that EMA with gusto: also up there is the 50% retracement of the entire decline. And since 1950, no bear market rally has retraced more than 50% of the prior total decline and then gone on to make new lows. So, that’s why I’m worried about that and I why I prepared that post just in case. We breach that EMA with gusto and we’ll be close to breaching that retracement, too. But, we don’t have to worry about that yet given the terrible weakness in the market due to the huge jobs beat, lol.

Similar to the head and shoulders idea discussed yesterday (here), I can’t rule out further distribution in the short-term. As with the H&S, if we make one more push, this might just be an ending diagonal, like this:

SPX

This would clear things up for me, too, as I still can’t count the last motions as an impulse wave down, and that’s what I would like to see from the top.

Again, market could puke whenever it wants to if it wants to, but if they intend to keep us up here as long as possible, a scenario like this cannot be ruled out either.


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