SPX: Follow Up of the Short Term EWP
I know, lately my daily updates are getting really boring, but I cannot change my scenario.
There is no change:
The probability of a pullback is overwhelmingly much higher than the odds that the up leg form the December 31 has much more business to the upside.
I have recently discussed that momentum end breadth indicators are strongly suggesting that the most likely outcome has to be a correction, but price so far has denied the unavoidable event. Maybe tomorrow's FOMC has something to do with this market behaviour.
I remain confident that the recent price action is carving out a short-term top but at the same time I remain wary of expecting a large correction, since if my preferred count is correct, from the November lows, price is unfolding a Double Zig Zag, which still needs one more wave (C) up, therefore I am expecting a wave (B) pullback.
As I have discussed in my last weekend up date, NDX should have already begun a technical pullback with a target in the range of the trend line support (From the November lows) - January 2 gap fill = 2675 - 2660.93.
Regarding SPX the overlapping internal structure of the pattern unfolded in the last few days suggests that price is either unfolding:
b) Ending Diagonal:
The short-term pivot support is at 1495.33
If bulls today fail to achieve another higher high we can make the case of an already complete Ending Diagonal.
Although yesterday's high CPCE reading does not favour the complete ED option.
Regarding the target of the assumed wave (B) pullback I expect a bottom in the range 1474 - 1451.
VIX, which is now clearly diverging, is suggesting that equity market should be close to a reversal.