You may recall that we saw a Triangle formation going into the August 2015 flash crash decline. This time it’s capped by an Orthodox Broadening Top formation that has the potential for a much larger decline.

In addition, the time from the top of Wave A to today’s top is exactly 12.9 market days. From the 2187.87 high to the 2179.99 high was 8.6 market days. The time from the August 15 high at 2193.01 to the high at 2187.87 was 17.2 market days.

The minimum decline from here may be 4.3 days, taking a possible 43 market days from the August 15 high to a potential low this Friday afternoon. This may be the Primary Cycle that I had been looking for, so let’s be alert this week for that possibility.

VIX is surprisingly strong today, but given the potential for a decline, may be warning us to stay on the sell button.

DB matched Friday’s high at 13.95, which may indicate a reversal is in progress this morning. The pattern is very bearish. I did an analysis of DB some time ago that suggested a lower single digit price, but I don’t have that information at my fingertips.

BKX appears to have finished its top today. BKX, which usually on a different Cycle than SPX, appears to be matched for the next set of declines. It may also have a large correlation to DB.

Regards,

Tony

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