SPX did not bounce into the close. At the end of the day it challenged Intermediate-term support at 2069.17. This may be the end of sub-Minute Wave (i) of Minute Wave [iii]. There were a lot of squiggles at the end, so it is difficult to say whether it completed the Wave (ii) retracement or not. If so, it was severely truncated.

That leaves us with two possible outcomes for Monday morning. The first is a bounce to complete what may have been the start of sub-Minute Wave (ii). The second, assuming Wave (ii) was finished, would be a gap down in sub-Minute Wave (iii) beneath the 50-day Moving Average, fulfilling and possibly exceeding the Head & Shoulders target at 2055.65. That scenario would likely take SPX to the next level of supports at daily mid-Cycle support at 2007.22 and the 200-day Moving Average at 1999.56.

The daily Broadening Wedge Trendline lies just below, near 1990.00. The VIX confirms this move and the Hi-Lo closed at -15.00, also confirming the sell signal.

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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