I was excited Monday over the 20 handle gap down on /ES and then support, but what I think we actually had here was an end to an oddly-shaped minor wave 1 (see chart).
The larger count has us in wave 3, but this is a subtle one -- it's not extending. At SPX 1930 (today) it should be slightly longer than wave 1, but not at a multiple of 1.618x of it.
So we either have a stealth wave 1 (bear case), or this is yet-another ABC off the top that is just a correction. If we close with a stronger-than-expected push into Friday (SPX 1957?) that will leave us sitting right on another inflection point. Which way to go?
The bear case would take us still lower next week to meet the 200 DMA at 1904 support and the Full Moon. The following week we would have one more kissback off the old rally channel at SPX 1966, and a dive to the low-1800s into EOM October.
|SPX 10-02 a.m.|