SPX is now probing the lower band of a narrow but steady upward channel that has formed over the past two months, as well as the line connecting the Feb2019 and Sep2019 highs - the gray line.
Odds appear to favor an eventual breach of this channel to the downside and the current pullback has its potential to do so.
If so, monitor whether it is a larger degree correction (Chart 1, 2 blue) or a small degree pullback (Chart 2 green) to probe the 50 DMA.
With an impress blowoff first week of new year trading, SPX is now probing the upper boundary of a two-month long "cigarette".
We have been tracking the rally since March as a (W)(Y)(Z) structure (Chart 2), Friday's rally allowed us to track a simple zigzag (A)(B)(C), with (C) being an expanding diagonal triangle.
The minimum price and time requirements have now been met as of Friday.
Note that for the potential expanding diagonal triangle (C)-up,
A-up is 466.49 points and 16 or 17 days.
C-up is 588.37 points and 46 or 47 days
E-up is 592.75 points and 47 or 48 days and counting.
SPX runs up to the upper boundary of the "cigarette" - similar profiles in INDU and NDX.
[EOD] -
Reaction at the gray line. Looks like a small-degree five-down, pending morphing if it wishes to be.
[1250PM NYSE] -
Cash makes another ATH, futures is very close. Now tracking the blue C to wrap up the blue (Z).
[1030AM NYSE] -
SPX cash is now at the upper gray line. If the green C is playing out, the following chart shows a potential five-down and three-up. Otherwise, monitoring the blue C.
Stocks - Probing the upper channel line. A reaction is likely.
Bonds - Yields probing the lower channel line. A reaction is likely.
USD - Index has already broken above the trend line, already retested once. Second retest in progress or or building a base?
Gold - [b]-up of B-down looks more likely than C-up.
Oil - A retrace of the rebound looks probable based on the wave structure and the dollar profile.
