Market Update for Monday, July 31st, 2023

The S&P 500 continues to stay in this more or less sideways consolidation:

SPX

One advantage for the bears is that if we view that structure as a classical chart pattern, it’s an ascending triangle, but the huge selloff on Thursday makes it looks quite odd, despite the fact that most of that drop has been recovered. And so presently, it doesn’t look very good as an ascending triangle.

It could still be and if we close above 4600 or so, it will remain possible that the rally continues. But, if enough technical damage was dealt on Thursday to invalidate an ascending triangle as a structure, there’s still a good chance we may head lower.

If we do, here’s what we can try when trying to count things:

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So, we’ll see. Thursday’s big drop still looks promising to me. And I hope everyone has a fine evening.


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