Friday, October 23, 2020

SPX Update: Bears Still Have the Ball

Last update noted that we probably had to continue giving the edge to bears, and SPX has made a new low since.  It then proceeded to bounce right at the previously-noted blue support zone:

The only thing that's slightly bothering me on the chart above is the diagonal shape of the decline -- but I'm having a tough time seeing how the 3549 high could be a b-wave, so I'm ignoring the diagonal shape for now (however, on the outside chance SPX clears 3449, then we'll know why).

Also be aware that there's also a count where the (presumed) c-wave rally could end near ~3467, as discussed in the forum yesterday.

Zooming out to the daily chart, we can see SPX is back below the larger pivot.  We can also see that blue 3/C from the chart above could take SPX roughly to the black trend line on the chart below... which might then be "decision time" for whether the decline from 3549 is going to be an ABC or a larger impulse that takes the market south of 3209:

In conclusion, as long as bears continue to hold 3549, we're going to continue giving them the edge with this pattern.  It's worth noting that 3/C on the first chart could take us right into Election Day and align with "decision time."  A contested election (which seems rather likely no matter who loses) could potentially stretch the decline into a larger third wave that takes the market south of 3209.  Trade safe.

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