I just wanted to relay to you that SPX had reached its daily Cycle Top resistance at 2044.34 this morning. Generally, only wave threes (of any degree) may exceed the Cycle Top on any consistent basis. So we may expect to see SPX make several attempts at the Cycle Top, but it should not close above it.

What is helpful here is that the upper trendline of the Orthodox Broadening Top is at the same level, if not a few points above it. That should be the secondary stopper of this rally.

NDX is about 14 points shy of its Cycle Top resistance at 4239.16. The point where Wave [v] is equal to 38.2% of Wave [i] of C is at 4236.80, so there is a strong correlation of the two technical indicators.

MUT also appears to be making a run for its Cycle Top at 147.14 and a new high. This is the chief mode of financing stock buybacks, so in order to keep the market liquid for insider selling, it is imperative that this market appear healthy to attract new investors. Whether it makes its Cycle Top is uncertain. It may only need to marginally exceed its prior high at 146.01.

This still leaves a huge Broadening Wedge formation in MUT.

I am watching the Hi-Lo index to see if today’s ramp stops at or below the upper trendline of the Diamond formation. No sell signal here, yet.

VIX isn’t buying the new highs in the SPX, although it may still test the trendline of its Ending Diagonal once more. The downside limit cannot exceed 12.38, if this is a true reversal.

Regards,

Tony

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