Yesterday started off uglier than Ben Bernanke's beard after a dust storm, but then SPX hit Target 2 and bounced like a really bouncy thing made of rubber (writer's note: come back later and substitute witty simile -- if there's time, which there probably isn't).
Presuming readers took at least partial profits at Target 2, then 50+ points of profit in a couple weeks is probably good enough, so bears can relax and play it by ear from here. Which may be good, because I'm inclined to suspect the market has another trick up its sleeve. Specifically, the trick noted at the end of Wednesday's update:
I should add that there is one option that bottoms near Target 2 (first chart), then rallies back up all the way to test the zone near the all-time high, THEN drops back toward (or below) Target 2 again... but I'll cover that in more detail if it becomes appropriate.
It's become appropriate to cover that, but let's start off with the 1-minute chart:
Here's a chart of the potential mentioned on Wednesday:
In conclusion, I'm somewhat inclined to suspect the complex flat outlined above, but there is no way to "prove" such a pattern until it unfolds. This is 100% gut instinct, so I could well be wrong about the bounce continuing. For readers who have followed these updates for the past couple weeks and are thus 50 points of closed profit to the good, it probably doesn't matter much, because there should presently be no feelings of desperation or fear of "missing out." The bull potential is that the decline is a complete WXY correction, and thus heading to new highs -- another good reason for bears to be very cautious here, and await the pattern shown above (and its corresponding relatively-low-risk entry) before considering new positions. If we start to see impulsive looking declines prior to the blue path materializing, then we'll consider the possibility that a continued decline may unfold more directly. Trade safe.
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