SPX: Follow Up of the Short Term EWP
Just a brief update since tomorrow morning I will not be able to post the daily follow up.
Even though today's down side action is not impulsive (It would not matter since I am expecting a wave B pullback) in my opinion it seems reasonable to consider that today we have the inflection point for the overdue correction. Above all judging from:
- Daily RSI with a confirmed Double Top + it has breached the trend line support from the January 8 low.
- VIX up 7.59% is confirming a short term bottom, although it remains to be seen how this bounce will evolve when/if it approaches the resistance at 14.77 (where the Bollinger band is also located) with the Stochastic entering the overbought zone.
What is still pending to be confirmed is the Double Bottom of the US 10 yr. Treasury Note (Risk Off gauge).
As mentioned above the SPX internal structure of today's move is corrective, therefore it will not be easy to ride this pullback, as you know corrective patterns can easily mutate.
So far we could have a double Zig Zag that should establish the bottom of the wave (A) of a larger Zig Zag down.
If bears are able to maintain even if with a corrective pattern lower highs/lows they will find the first big obstacle at the 10 dma = 1493.
Regarding the bigger picture, as you know, my scenario calls for a pullback wave (B) that will probably be a mild one with an initial target in the range 1479 (20 dma) - 1463 (At the moment my guess is that a bottom could be established in the higher range 1479 - 1474.51).
I have bought $SPXU at 32, at the moment without a stop loss (I will probably reference the stop loss with SPX).