SPX is above its 50-day Moving Average this morning. This has caused overlap in the decline and indicated something more bearish may result. Assuming that today’s Pi date is forecasting another Master Cycle low imminently, the overlap creates a (i)-(ii), i-ii scenario that suggests a flash crash may be in the making. This may be followed up by a plunge beneath the Head & Shoulders Neckline at 2040.00. The retracement may go as high as the 4.5-year trendline.

A higher rally brings us the probability that Wave [ii] isn’t complete yet and may spend the rest of the week going higher. It may also suggest that the Master Cycle low, which we are anticipating, may have been complete on May 6 (2039.45), instead.

So far, the VIX is suggesting the first option, having rallied above its 50-day Moving Average at 15.03. It may go back beneath it, but a decline beneath the mid-cycle support at 14.58 may indicate something else may be transpiring.

The Hi-Lo Index also does not confirm that a Master Cycle low has been made, yet. Since the “shelf” of support appears to lie at 5.00, we would need to see the Hi-Lo decline beneath zero on a closing basis to confirm the decline.

The lows appears a bit artificial, don’t they? Possibly the algos are aware of the importance of this indicator.

Regards,

Tony

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