What looks most reasonable is for SPX to rally back into the 7700s (potentially even mid to high 7700s) and then decline again below [Friday's] low.
And that's exactly what happened. Things feel a little trickier now, because the market is back into a sort-of meaningless price zone and doesn't have much on its "need to do" list now. It already resolved the most likely b-wave and captured its downside target. If it wants, it could absolutely go for more downside over the near-term -- but it has several options and doesn't "need" to do that.
So, while more downside looks possible, it's higher risk to chase that from the current price zone. In part because this market has been so in love with complex corrections, and who's to say it doesn't opt for another one now?
From an emotional standpoint, the best entries usually look scary while the worst entries often feel safe.
Anyway, if I had my druthers, I might think we bounce and then head lower again... but my confidence level is appropriately low. Not all reads are actionable. Trade safe.
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