Whenever the market is acting stupid, you're in a wave 4.
So I'll suggest a wave 4 triangle here, still correcting from the QE3 excitement top at 1474.5.
It should finish up next week, and have us rally into October opex and in anticipation of the October FOMC, which could mark the final market top.
That sets us up nicely for the long-awaited drop back to SPX 1400, where we can bounce off horizontal support as well as the lower channel trendline. We can still make it to the 1266 area by December FOMC, once we learn how to sell-off again.
Or ... the triangle finishes up into FOMC, which sends us up in W5, rallying into the election. I'll look more closely at both scenarios tonight.
|W4 triangle and proposed W5|