Wednesday, October 5, 2022

SPX Update

For the past week-plus, all we've done is talk about the fact that SPX was sitting smack dab in an inflection zone, so yesterday's violent rally comes as no real surprise.  Unfortunately, a one-day rally does not yet answer anything, and the last bottom isn't well-defined enough for me to make a high-confidence call as to its nature.  Accordingly, I've outlined some things to watch next, on the charts below.

Last update did note that if SPX could break out of the steep blue channel, it would likely rally toward 3750, which it did and then some.

From a wave perspective, there's really nothing to add yet:

Big picture, it's "pay me now or pay me later," and SPX will need to reclaim the broken green line to have a better shot at "pay me later":

In conclusion, yesterday's violent rally could be the start of the complex blue 2 on the final chart, but I'd caution against reading too much into a "one day rally."  Bulls will need to see some follow-through before getting their hopes up too much.  Trade safe.

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