Current SPX Position: Long at 1655.13
Next Action: Stop and go short at 1658.87
System Score: 5=Neutral=Trend Score + Turn Score=4+1
Proposed New Score: 56%=Neutral=Trend Score + Turn Score=20+36
The System is long, but the Score is neutral so the System will go short at 4hr support. I think the 2 likeliest paths on Monday are (1) a wave 5 down counting from 1710 with w5=w1 at double bottom 1639-1640 or w5=w1*1.62 at 1625ish or (2) a 3-4-5ofA rally to 1680ish. In either case, I think SPX will test 1670-1680 soon followed by the 1500s. Pretty much every significant drop during the bull market has been a 4-5 week affair or a 9-10 week affair, and we've completed 3 weeks since August 2nd.
I like the wave 5 down scenario on Monday, because it might allow for a Turnaround Tuesday with a rally through end of month and Labor Day. And, unless you think we are going down 100pts in the next 1-2 weeks (to finish a 4-5 week trend) with sentiment being so quickly bearish and TRIN 5SMA at levels indicative of a bottom with VIX just confirming an SPX buy signal, a 9-10 week downtrend from August 2nd to the first couple weeks of October is favored. That would allow something like 1710-->1625-1640-->1670-1690 followed by a 4-week 100-150pt drop with 3of3/C falling in late September. We should know Monday morning what Mr. Market wants to do. Good fortune.
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