The wave 4 move we had been watching pulled up short at the 1814 level, possibly because RUT and the techs bounced off their respective 200DMAs. So the S&P 500 put up this truncated sell-off, followed by a 70pt rally back to 1884.
While I was out hiking, we pulled back to 1850 and held support. Add another 70pts to this, and we get a possible target for the SPX of 1920 around May 20. See the chart below, it looks nice and proportional. This will complete a giant ending diagonal from the 1646 low, which becomes the target for the first leg down.
SPY calls are expensive! Look at the May expiry, the highest OI for calls is the 192s at over 200K contracts. That's a lot of calls. I bet they are right.
|SPX 04-30 a.m.|