Stock Market Rally May be Complete
Stock-Markets / Stock Market 2017 Apr 19, 2017 - 06:51 PM GMT
It has become obvious that the higher Cup with Handle formation was not triggering the sell-off that would be expected. Both the daily chart and the 2-hour chart actually show a better position for a clean Cup with Handle pattern with the Lip at 2322.25. The Broadening Wedge remains the same.
SPX appears to have halted its rally at the 50% retracement level. It remains on a sell signal with additional confirmation beneath 2322.25.
There seems to be a striking similarity with the 1987 crash scenario, but the outcome may quite a bit different. For example, next week shows a potential Primary Cycle low, perhaps Wave (3), while the next Master Cycle low, Wave (5) of [1] is not due until May 26, at the soonest.
What this means is a possible series of cascades that occur over the next several months.
My best estimate is that Primary Wave [1] may bottom at the end of May, while Waves [2] through [5] go through the end of July. I don’t want to get too far ahead, but you can see that this may be only the beginning.
VIX also halted its decline near the 50% retracement level.
The Hi-Lo Index is still above its mid-Cycle support/resistance at 103.45.
Regards,
Tony
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