$SPX: A Few More Thoughts (And a Comment on $AAPL)

It doesn’t ultimately really matter if we try to count the structure as a zig-zag (as I tried here) or as a flat (which I have also entertained before, such as here). Since the last two lows are close to each other, it won’t ultimately make much of a difference for the coming target.

I am looking for a wave 2 of primary (pink) degree to be put in place here. Today is one candidate where that may have happened. If we finally roll over, I expect us to give this rally back somewhat quickly. I expect us to break below the 9/6 low for Orange 1, and then perhaps retest the trend line from beneath (for Orange 2), before ultimately moving to 3401 which is my target for Pink 3:


While the S&P has pressed to a new high today (because of Apple), JNK never even got above Friday’s high. The VIX was bid all day today. And Bitcoin is still only retesting the bearish wedge from beneath today. And I hope this means today was distribution.

Zooming way in, we do see a little triangle here today. Most people will automatically assume that means it’s a 4th wave, and that we must head up again. And that is possible. However, “ending diagonal triangles” also look like this and can occur at tops. And there is a good fib here as well:


So, we have everything we need. I continue to think this is a bear market rally. It is always possible that it is not yet done, but I will continue to anticipate its conclusion. As for playing this, I am simply adding to my put positions at this time, as I expect this to fail.

Quick point about Apple (I discussed it a bit in the chat today). At the end of last week, I thought it was possible—given the parallel rails it was in—that it had generated a very bearish “running flat.” Of course it did no such thing, and rallied stupidly powerfully instead. But, that doesn’t exclude the possibility that it’s still a flat, as the first two swings look like 3-swing moves. And so, it’s just as good as an “expanded flat” (instead of a “running” one). We reached a good fib at today’s high (green arrows) and we closed a gap (red arrow).


So, let’s see.

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