Monday's brief update noted that 2112 SPX could be treated as a level to act against, while Wednesday's update more firmly anticipated lower prices (complete with downside target zones), and suggested that it might be Time for Bears to Wake Up. After Monday, Apple "surprised" the market in a negative way; then, after Wednesday, the BoJ announcement likewise "surprised" the market in a negative way. Long time readers know I firmly believe that the charts lead the news, not vice versa, and this week stands as further testament of that.
Sometimes tops are a challenge, but this one was pretty obvious in the charts, especially by Wednesday. There's been no material change, and I still expect SPX will reach Target 1 from Wednesday's update, with a decent shot at reaching Target 2:
We're currently in a small third wave decline, but -- bigger picture -- the potential that this is "another fourth" wave can't be fully eliminated until this 3-wave decline becomes impulsive. Thus, if the market makes it into the 2030-40 T2 zone and the smallest waves begin to look like complete waveforms, bears might want to watch carefully to see how price reacts to that zone.
In conclusion, lower prices continue to appear likely over the near-term. Bigger picture, the possibility for another 4th and 5th wave can't be ruled out yet, but this remains "bearish until proven otherwise" territory (as noted on Monday) for the moment. Trade safe.
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