SPX is still operating within the established 6+ month price range ~2040-2140. 2114 and 2063 are potentially important lines in the sand but not necessarily. IF IF IF SPX is about to breakdown as I have been favoring, it would make sense for 2020 +/- to provide a pit-stop on the way down. Why?
1. Tony Caldaro at OEW has 2019 +/- 7 as the next price pivot below 2070/2085. I should note he is calling for a triple bottom around 2040 for wave measurement reasons even though he technically has no pivot there.
2. A leg down of 70-100 points +/- in 4-7 days has been very common in the past 8 months and 2105 to 2110 minus 70-100 = 2005-2040 centered around 2023. 2079-->1973=106pts in 7 days. 2094-->1992=102pts in 6 days. 2065-->1981=84pts in 7 days. 2118-->2040=78pts in 7 days. 2115-->2046=69pts in 4 days. 2130-->2057=73pts in 5 days. 2133-->2064=69pts in 5 days.
3. If the bearish triangle is in play, one way to measure the breakdown is to take the top of final triangle wave E and subtract the length of the leg coming into the triangle. SPX 2135-->2044=89pts. Wave E is currently at 2105. So, 2105-89=2016 with a chance to rise a little.
4. 2020 is almost exactly 1% below the key 2040-2044 support area and enough to exhaust most stops.
5. 2019 is a key pivot top from the last significant high in September 2014.
I explained previously why I thought 1922-1951 was a strong target area, but there are almost always pit-stops along the way. If you count SPX 2135-->2044 as an ABC "W" wave followed by a triangle "X" wave back up to 2105-2113, then the "Y" wave should also be an ABC with perhaps a 4-6 day A bouncing weakly from 2020ish back up to 2040-2060 for a couple days in a B followed by a sharp C in 4-5 days to 1922-1951. Such an SPX scenario allows for stop-running followed by a bull trap for buy-the-dippers and C=A expectations with a final quick flush to maximize OPEX profits into August 21st +/-. Then, we could get a rally on the most extreme oversold indicators in a long time and the belief that the Fed won't actually raise rates with mediocre news and a falling stock market...until they actually do in September. That bearish SPX triangle scenario also fits my first Dow scenario where it has been forming a series of 1-2 waves and is ready to collapse in a wave 3.
Of course, the rapid August bearish scenario becomes much less likely if SPX rallies above 2114 in the next couple days. If such a rally occurs, we may be in the alternative I presented which is a Dow LDT down to last Friday's low followed by a 1+ week rally back to slight new SPX highs and then more chop in the 2040-2140 price range until a large breakdown forms probably into the mid-September date cluster. One more factor that has now been added to the bear side is that there have been no BOW days in the last week while we've now had our 2nd SOS day and it was very large. Remember, they often don't take effect for 1-3 days, but 2 SOS signals are on the books so any upside should be fleeting. On the bull side, put/call remains a little too elevated but other sentiment/breadth indicators reset quite a bit today and Mr. Market has earned a ton of money on options in the last 8 months with all the sideways action so I think all option holders are in extended pain and thus atypical behavior would not be that unexpected. Good fortune.
P.S. It's after 3PM EST Tuesday and, despite a large selloff, today is not a BOW day so far. I am expecting a bounce near 2090 but I think the time is near when we won't get 50%+ retracements of drops over a few trading days.
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