Current SPX Position: Short at 1689.35
Next Action: Stop and go long at 1700.19
System Score: 7=Bullish=Trend Score + Turn Score=7-0
Proposed New Score: 60%=Bullish=Trend Score + Turn Score=32+28
The Score is narrowly bullish but the System is in a short position. An ideal bearish scenario would be for SPX to test the previous 1676 pivot or lower and then fail on a 1-2 day rally back to 1685-1695. That would likely setup a wave 3 down and potentially a H&S formation with backtest of the neckline breakdown at 1685-1690 followed by a measured move to 1660ish and likely a test of the 50dSMA near 1650. An ideal bullish scenario would be another 1-4 hours of consolidation or a successful retest of 1685ish followed by a rally through 1700 which could pick up steam well above all-time highs. I suspect all the daily, weekly and monthly negative divergences are coming home to roost with weakness into the September Fed meeting, but it also appears the Fed is reluctant to make large waves and, while consumers and businesses seem cautious, they have not thrown in the towel and higher interest rates could take a couple more months to have full effect perhaps allowing SPX to fluctuate at 1550-1750 into end of year. Good fortune.
1700.18 is also a Fib 61.8% line. Bullish above, bearish below...must break higher AND hold that level. Simple as pie.
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