$SPX Evening Update

Ok, now, yesterday, I wasn’t very confident that the decline was over because I didn’t see very good fibs and I had a lower target at my orange box (which is the 50-61.8% retracement of this year’s advance).

And that part worked because we weren’t done after all. It looks a little better now, and it is possible that my blue 1 is in. It counts a little better now and has reached the tippy top of my box. And if it is complete, we may either consolidate or retrace for blue 2. A retracement could look about like this:


If we keep moving lower, I will assume we’re still in blue 1, but I like the wedge we formed today, as that can be an ending diagonal, and something like that is what I’d rather see at a low.

I will also show the bullish alternative because given the BAM thrust (link to Twitter is here—you should read it if you have not already done so) we should have a pullback after that, and we are now doing just that—pulling back after a BAM thrust, and there’s no telling how much it needs. Could be 3%, could be 5%, could be more.

Of the two counts, I am not smart enough to pick which of these is right, and I’m not lucky enough to guess, so I will just show both for now.

If the market is secretly in a big hurry to move up, that rising wedge we were in could have been a leading diagonal for some “1” and we’re in a “2” now, but to the upside, completely contrary to the bearish view which puts us in a 1-2 to the downside.

If this turns out to be the case, we may make a big “h” like this:


So, for the time being, both of these will look about the same in the short term. If we get a rally, then fall back to this area, right at the end of the “h,” we’re either going to get continuation lower if we’re bearish or we’ll get a huge reversal and go higher if we’re bullish.

I think it may end up leaving us with this decision:


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