A Few Additional Thoughts on $SPX

The view expressed early this weekend (here) was noting the perfect impulse wave we could detect down to 3621 (the green count leading to orange 1). It’s textbook because the wave relationships are the most typical: 1.618 x wave 1 for the 3, and 1:1 for the 5. Now, from that spot, if we’re real bearish, I would have expected a retracement for orange 2, like this:


And instead of that, we just keep drooping lower. Now I don’t know how bearish I should be at a low. It’s much better to call for a big drop up at a high. That worked very well leading into the CPI print in mid September (here), which produced that huge gap down, and it also worked very well leading into Friday (here). But notice where I failed to do that. It was heading to FOMC (red arrow):


It didn’t look like it could be a 2 at the time. But it certainly looks like it now. “Twos” tend to retrace, they tend not to move sideways so much. Scary thing is what motivated this alternative count was by making the orange 2 here take even longer to arrive than most would expect, so that most would miss it.

But is everyone expecting to wait for that 2 now?

Did it just sneak up on us like this?:


Don’t know.

I can detect a relationship between the lengths of the Green A and the Green B, but I don’t see anything easy for the Green C. It’s an odd structure up there toward the close. So I guess it’s possible that instead of taking a longer time to get here (so fewer will catch it because of fatigue), it’s at least possible that it comes more quickly than expected, accomplishing the same thing (fewer people to catch it). I’m not sure about this. I don’t like calling for twos near lows. Unusual. But, this is why I took hedges today, because I’m not sure what this is, and so if an unexpected huge move down does come, I should do well in that. But I don’t like it when things don’t go according to plan, and that happened today.

If we do end up getting a very strong move down overnight, then I would have to suppose this is what is happening. We will just have to see. I can’t say this is particularly likely, but I guess I have to say it’s possible.

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