MTU Weekend Ed. - Three Waves Down (12/28/18 close)

There was significant negative divergence around the all-time high in SPX back in September. A three-wave decline pushed SPX to its lower B-band and 50-month MA this past week.  Sentiment shifted with a spike in VIX and price rebounded from technical levels.  Watch the mid- and lower- B-bands competing for prices in the near term.

The MA crossovers (circled in the above chart) suggest potential for deeper and longer selloffs.  However, the three-wave sell-off so far counts well as an ABC (Chart 2) decline unless downside momentum picks up very soon  (Chart 3).