No Real Changes to $SPX Analysis

While we had a weak day, we really didn’t do all that much that requires me to make any serious changes. The long-term analysis remains the same:


A large “A-B-C” (in pink in this case) coming to an end.

I believe we are putting in a major low at these levels, and that this decline is simply a retest of the June lows (and not a crash taking us to much lower prices).

As to whether what we’re completing here is the whole shebang, or just the first leg of a much larger 3-wave macro pattern, I don’t know yet. I have placed a yellow “a” at our low, but that part remains almost entirely speculative for now. It could also be the case that the pink A-B-C on the chart needs to be in the higher yellow degree, and we’re totally done; but, I suspect, after a close look at Bitcoin this weekend, that it—and many other things—need a larger 3-swing move, so I will leave the yellow “a” on here for the time being (you can review my recent thoughts on Bitcoin here). The idea is: if Bitcoin has a “b” and “c” still ahead of it, the “c” part of that should be very crashy (far more than any of this, much more COVID-like), and the indices will of course be doing that, too. So, if the advance from these lows (if we get one) looks “corrective,” then I will favor the view that we have two more swings ahead of us.

Regardless of that, I expect us, if we are just retesting the June lows, to head to all-time highs again after this.

Zooming in, everything still counts well, if ridiculous though. And it’s straightforward to account for the nominal new low today. It still looks like a 5-wave pattern, but it looks like it’s the most ridiculous subdivision, where the 5th Orange wave fully subdivided into the Green waves, the 5th of which subdivided into its own blue waves, etc., etc. all the way down:


We’re still effectively at the same good fib we were at on Friday (the 1.272 long-term relationship). Sentiment is at record lows, typical of bottoms that have great endurance. This continues to feel entirely capitulatory to me, a terminal move. No changes on that front. There remains excellent breadth divergence here. Things look good, and I think a powerful rally remains the most probable outcome.

Given the turmoil in the currency markets, I have little doubt that they will intervene at any moment.

Earlier today, I was worried about a flush through the June lows. I swung some puts in case that happened. And since we still haven’t been able to break these levels below us, it’s given me confidence that we may not, and I took the puts back off after we moved a little ways in their direction (it was just a small short-term “what-if” trade), and I now remain long only here for the time being.

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