Last update featured an unabashedly bearish tone, and the market obliged by wiping out the opening pop, and by ending the day nearly 40 points lower than that open. By all rights, the intermediate bear count looks like it's in the lead, but things may get a little hairy around current levels. Bulls are looking for support here, so there may be some buyers lurking around the corner, and that could make for some backing and filling over the near term.
During the overnight session, ES hit the cash equivalent of my "MB: 3" target (SPX 1897-1911), which then generated a reversal higher. The main thing that continues nagging at me is the potential for the (C) wave rally that I've discussed over the past few weeks. The problem with B-wave declines is that they don't have true invalidation levels, so I still can't rule that out. Nevertheless, for the moment, I'll operate under the assumption that the pattern is a straightforward bear wave until proven otherwise -- just continue to at least remain aware of the B and C wave possibility for the time being.
SPX's updated chart is below:
As promised Friday, here's an updated look at a big picture chart, via RUT:
In conclusion, we're still well-into bear territory here, and the patterns still seem to argue for an incomplete decline. For the time being, we'll presume the straightforward bear count is unfolding, although there are still options for bulls to muster a big counter-trend rally before bears land the knockout punch. In both cases, though, the market does appear that it's continuing to point lower for the intermediate term. Trade safe.
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