SPX bounced from a lower low and retraced to challenge its Cycle Bottom at 1931.58. The bounce may be over. The next target is the Head & Shoulders neckline near 1798.00 to complete Wave [i] of C. This may be accomplished later today, with a Wave [ii] bounce at the close. I expect Wave [ii] to challenge the hourly Cycle Bottom again before the next big decline. Notice the opening gap wasn’t closed, denoting weakness and distribution.

This decline is nowhere near a washout and should be even more pronounced than the January 20 low.

VIX also broke out above its minor Head & Shoulders neckline. We may also see it meet or break out above its major Head & Shoulders neckline later today.

The NYSE Hi-Lo Index gapped down this morning and may exceed its 4-year trendline later today. I fully expect Wave 3 to outdistance the August 25 low.

Regards,

Tony

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