SPX is now probing the key resistance line since 2022, the 2022 down trend line.
Unlike the first two probes in Q1 and Q3 of 2022, the most recent probe in Q4 2022 has resulted in only a moderate pullback. And now the index is attempting to fight it gain.
Little change in the big picture but interesting small-degree structures have developed.
If the pullback this past week is wave two (blue) or wave B (green) in the form of an expanded flat, the low is likely in.
Otherwise, this 5 wave down (red) is the initial down leg.
This past week's drop nearly filled the early November gap in SPX.
SPX is at its down trend line resistance and its previous resistance zone again, while the Dow once again closed its August high for a second week.
There is no change in the interpretation of the larger structure - see last week's post.
SPX is potentially at the end of wave 1 or wave A up this year's low (or the very bearish wave C of an irregular flat which fails to exceed the August high), particularly if the resistance holds (blue).
If we see an immediate strong rally (from retirement program inflows, holiday seasonals, improving sentiment on interest rate outlook, etc) which allows SPX to break above the resistance, we may be looking at a 3rd wave up (green).
