First important low at March FOMC

We're clearly in the sub-waves of a big wave 3 down, which will reach the 1.618 extension level of W1 at 2256 SPX.

If we draw some channels and add some fibs, we can propose our first low on all of this is the March FOMC, which also lands on a Full Moon.

SPX proposed low March FOMC @ 2124 SPX

Larger question is whether the real crash phase that comes in Fall 2019 can break us out of a very long term, important channel.  Losing this channel probably means the end of the long-term economic cycle defined by the existence and effectiveness of the Federal Reserve itself. 

I'll let you draw your own conclusions from that proposal.

SPX weekly

If we do bounce

It is still possible we are finishing up a Domed Top formation.

Positive news, oversold indices, short squeezes ... it is possible the market wants to wait to see Q4 earnings before it finally dies.

It would be a variant of the head & shoulders top off this neckline, target 2083 (election lows).  Would only work if we rally today and tomorrow to get over the intraday highs and trap the bears.

SPX daily

We are close to the Bear

Friday we closed right on the neckline of a head & shoulders pattern targeting 2260 on the S&P 500.

All we need now is a little push, and we'll be in an official Bear (2350 S&P) by the Fed meeting and announcement this Wednesday.  That will be a sweet spec bounce, as well as a final leg down to the head & shoulders target.

v of 3 down is, of course, a US .gov shutdown as Donald John Trump confronts the Bolsheviks.  May we prevail.

S&P 500 hourly

Competing counts

We're at one of those junctures where we have plausible setups for both bullish and bearish outcomes, on different scales.

can't beat the Chow Yun-fat

The reason is the impulse wave the S&P 500 has drawn since the 2630 low around Thanksgiving (Full Moon).  Is it the c-wave of a long-in-tooth wave 2 up?  Or is it the initial leg of a larger five-wave structure to new all-time highs by EOY? 

Northy thinks the Santa Rally hypothesis is very plausible here and very dangerous (to bears).  The next two days of this week may clarify things: IMO bearish if the market runs higher, and bullish into Christmas if she pulls back sharply.

With POTUS 41 passing, Powell's testimony Wednesday now falls on a day with closed markets.  This adds to the uncertainty.

S&P 500 hourly