Regarding stocks, key questions at the moment are two fold:
(1) Is the correction over if stocks did not top in April/May?
(2) What's the upside potential for the rebound if stocks topped in April/May?
If stocks did not top in April/May,
the June low has the potential to mark the end of the recent correction (Chart 1 blue and red), which would be the black label number 4 in Chart 2. The decline to the June low has now adequately satisfied the price and time requirement for a wave X/B correction (Chart 2).
However, there’s no confirmation of the bottom just yet. As the purple count in Chart 1 shows, a retest of the June low is a respectable scenario at the moment. In that case, a wave [b] rebound with respect to the initial sell-off (most likely off the orthodox high) is tracing out an expanded flat.
Wave [c]-down to a fresh low or a truncated low is to follow in the near future. With respect to a truncated low, note that a decline below 1291.98 (the mid-May low) would satisfy the minimum requirement of the proposed wave [c]-down. In addition, a truncated low would furnish a respectable inverse-head-and-shoulders setup.
If stocks topped in April/May,
there is heavy resistance around 1330 and heavy support about 1305 in SPX. The market has reacted strongly to both levels this past week. Going into Friday's close, SPX is making a second attempt to break above 1330 (Chart 3). Going beyond, there's heavy resistance around 1345 which coincide with a fib-50% retrace. Further resistance is at 1355. The fid-61.8% retrace is at 1363. 