We saw the SPX decline beneath its 50-day moving average in the overnight futures, only to be ramped up starting around 3:00 am. This is a sub-Minute Wave (iii) of Minute Wave [c]. The Model now calls for a pullback and a final sub-Minute Wave (v) to double overhead resistance at 1796.17.

The Cycles Model calls for a turn in SPX tomorrow, so it may be that today may be a slow day of bouncing between support and resistance.

The 12.9 month Cycle may have ended on December 12, one day sooner that its December 13 deadline. However, the April 18 Master Cycle is on Day 242. Day 258 happens to be January 1.

If the Cycle are reverting back to the 8.6 month variety, then we have until the end of the year to complete this Master Cycle. Retail investors are late to the game and may have been put into a buying mood by this activity. However, institutional investors who have been in the game longer may be interested in harvesting their gains very soon. Especially when the 50-day moving average at 1761.11 is violated.

I have reset the head & Shoulders neckline lower to accommodate the recent activity. It also is more bearish than before.

VIX isn’t buying the ramp (at least not as much as the SPX). However, there is more room for a decline to Short-term support which has just crossed the 50-day moving average.

There is a high probability that VIX may be completing an Intermediate Wave (2), which implies a deeper decline, possibly to mid-Cycle support at 13.84. Should the VIX hold onto its gains, there is a probability of a much stronger move to the upside developing.

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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