Wednesday was a small SOS day following a larger one, but Thursday was a small BOW day likely mitigating the downside. Now, today was a very large BOW day, so downside risk should be limited for a few days. A 1-2% drop is unlikely to happen and unlikely to stick if it does. There was also a mini-spike in TRIN Thursday which usually leads to a bounce within hours or days.
A test of the measured target of 1963 is probably a good maximum drop target for Tues/Wed, but it may have to wait until late this week or next week. Dow is a little closer to its May pivot/cycle low (only about 50pts above) than S&P, so, if the market drops Tuesday, Dow may pierce that low while SPX stops shy of 1968 before bouncing for a couple days. Having said that, the intermediate-term danger signs are still in place, so it's not a market I'd be buying yet.
Within a week, I think the stock market will decide whether it's going to form a bottom near 2040 and bounce into June 19th OPEX max pain near 2100 or form an OPEX runaway downtrend near 1960-2000. Good fortune.
P.S. Dow broke its May pivot/cycle low which is generally bad news for the upcoming weeks but a 2-4 day rally appears likely imminent. If the markets decide to make another lower low today, I have a cluster of Fib/pivot/pattern targets at 1969, 1968, 1964 and 1963. VIX and SPX are trading outside their Bollinger Bands so a market reversal today could stick for a few days assuming they close back inside their BBs. But, I still emphasize danger as these moments can lead to real VIX spikes as well.
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