Today I post a brief update.
I have discussed in the recent past that there are emerging warnings from technical indicators and more recently from sector divergence, which are suggesting that SPX should be involved in a topping process. If the scenario that I am following is the correct one, then SPX should soon begin a corrective wave (4) pullback.
But the fact of the matter is that since the current pullback has failed to trace an impulsive down leg then we cannot rule out that SPX may attempt another push higher for the end of month picture, keep in mind that yesterday's eod print is only 13,5 points below the May's high.
In the weekly time frame price could be forming another bearish small range weekly candlestick, the third one since the end of January.
For the short term SPX price is constrained within the rising bearish wedge boundaries. I am raising the reversal # to an eod print below 1353, as price would break the rising trend line support & lose the 10 dsma.
Below I have my unchanged SPX "road map":
As mentioned above, the lack of impulsive down side action questions that the correction is already in progress but there are a potential bearish patterns in play:
- NDX could have shaped a bearish Head & Shoulder:
- KBE could be on the verge of breaking its bearish rising wedge. Still and eod print below 21.67 is needed.
The EUR has finally confirmed a Triangle break out, which if my count is correct, it should establish the high of a TZZ wave (B), and therefore we should soon see a top.
This scenario is now the key issue that has to pan in order to expect the equity reversal.
A reversal of the EUR will produce a waterfall move to the downs side of "risk assets".