While SPX hasn’t broken out above 2154.79 in the Premarket, there is a threat of a final probe to the 50-day Moving Average at 2161.11 that may turn the double zigzag (w-x-y) into an a-b-c formation, which is more appropriate for a Wave 2. That appears to be the pattern in the futures, although the futures and cash markets don’t necessarily have to agree in pattern.

In any event, should that be the case, the next turning point may be at or near 10:24 am (77.4 hours). Should it linger near the top beyond that interval, the following hourly Cyclical turn may occur near 2:42 pm (81.7 hours). The reason I give that information is because today is a daily turn date. It is day 43 from the September 12 low and the probable end of a small period of strength in the Cycle pattern.

This is a good setup for a panic Cycle decline. While the more famous panics occurred in 4.3 days, there are others that have happened in as few as 3 days. The 1997 October panic comes to mind.

TNX is marginally higher, but may be near its upper limit for a retracement. Watch this index for a sudden change, which may be apparent here before it is recognizable in the SPX.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

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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