The bull scenario initially looked good after my post last week, with clear breaks back over the daily middle band and 5dma on Friday. That triggered the 5dma Three Day Rule, which on a daily close back below the 5dma on Mon day or Tuesday would look for a retest of the most recent low. SPX then broke back below the daily middle band and 5dma at the close on Monday, and retested the 2670 low on Tuesday.
Now I was saying last week that the alternate bear scenario would look for a retest of the main retracement low at 2603.54 SPX. We have not yet seen that full test, but after the current rally, it’s likely that we will see that test. At that test SPX either finds support there on a marginal lower low, or extends lower to the 2018 low & annual pivot area 2530-40. (more…)