Thu 8/12. Sell signal still active.

(Update Fri 8/13 4:15PM):
Well, SPX held 1079 at end of day, but barely. Either SPX is going to gap down Monday to complete a wave 5 on Mon/Tues in which case we'll take profits on our remaining 1/4 short position pretty quickly and wait to reload shorts on the next bounce. Or, SPX has one more leg up to 1087+ in a double zigzag wave 4 to complete early Monday (possibly on a gap up in the first hour or two) in which case we'll reload shorts to 100% with a stop .1%/15min above 1093.94. We're in good position for either scenario. If SPX does bounce Monday morning, I am lowering my wave 4 estimate from 1090-1095 to 1086-1091. OPEX is next week so I think Mr. Market would probably like to stay in the lower middle part of the range it's traded since the last OPEX, and that range is 1060-1130. I'll try to post more of my S2EW research this weekend. Good luck.
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Active SPX signal: SELL signal from 1113 on Friday 8/6 was reconfirmed this morning on the large gap down during a 20dSMA test.
Hourly trend: Down with resistance at 1093.94.
Daily trend: Down with resistance at 1129.24 and support at 1057ish.
Last signal: Win. SELL signal at 1115 on Monday 8/2 gap up with no real drawdown. Profit was taken 1/2 at 1121, 1/4 at 1126 and 1/4 at 1121. Total gain .7%. 17 wins, 2 losses, 3 draws since 4/26.
Exit levels: Stop recommended at 1093.94 + .1%&15min rule. Profit-taking recommended at 1060.

System Notes:
In the past, when a new SELL signal has been issued while an existing one is still active, I've treated it as a separate trade and I think that is especially justified in this case since we are down to a 1/4 short position on the August 6th sell signal. However, I have not recommended going short on this SELL signal yet so it's not an officially consummated signal. To some, it might seem arbitrary when I decide to dive into gaps, but it's not. First, there has to be a signal on the gap derived from a 20dSMA test or key daily/hourly s/r being broken. Second, risk/reward based on System s/r levels is considered and certain key levels like the 20dSMA and the hourly BB20 are also considered.
 
Today, Mr. Market played its hand by gapping down while in a 20dSMA test. However, it gapped down right into the lower BB20 after riding it all day Wednesday. That's generally not a good place to go short. A similar situation occurred on the losing trade from July 20th, but I missed it then. Shame on me. I wrote the damn System and I'm still trying to get the hang of it. In fact, on July 20th, it was even a worse situation to go short than today. I've noticed a pattern in recent months where a good bounce within 1-2 bars off of the hourly BB20 usually leads to one more piercing of the hBB20 while an immediate riding beyond the hBB20 for about 4 bars usually leads to a tiny bounce, retest of the hBB20, bigger bounce and then 1 more test of the hBB20. On July 20th, despite the gap down during a 20dSMA test, SPX was finishing its final hBB20 test at the open. Anyway, hindsight is always 20/20 and that pattern has not always been so regular as it has been recently, but hourly BB20 is in the rules as a level to consider for profit-taking and if we weren't already down to a 1/4 short position, I would have recommended doing so at the open this morning. Maybe I should have recommended closing out the short this morning as I had originally planned, but the initial confirmation moves away from the 20dSMA are generally the safest point gains and S2EW says we could be entering a wave 3, so I want to maintain a 1/4 to 1/2 short position as much as possible after profit-taking during active SELL signals to catch some profits on any large downdrafts like we did Wednesday.
 
Opinion:
SPX likely needs to complete a 345 of C from Thursday morning's 1077 low, but it could be done. With hourly resistance at 1093.94 (+.1%&15min) and RSI where it is, an SPX rise to 1090-1095 should be a perfect spot to reload our short position with high reward-to-risk. If our stop is triggered, there could be a headfake, but RSI will likely confirm at that point that 1077 ended an ABC or 121 so 1100-1107+ will be very possible. I don't think that bullish scenario will happen though in which case SPX will fall in a 18-36pt wave 5 from 1088 (or 1090-1095 as I prefer) down to perhaps as far as 1056-1067 at or near the falling lower hBB20. 1090-1110 could become a battleground once again on any bounce from there with the bottom falling out if and when 1040 breaks again. Still, if you decide to reload short at 1090-1095, take the small stop loss if it goes higher than that and live to fight another day. Good luck.