1.
$S&P 500(.SPX)$ thought: The relief rally looks to be stalling with price trading near 5100 yesterday, and starting to trade back below 5000 this morning. The best relief rallies convince participants the pullback is over.
Staying ‘stuck’ in this 5000-5150 range for another week would help that cause.
Decline targets remain 4800, and the 4500-4600 range under a stronger corrective move.
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2.
$S&P 500(.SPX)$ thoughts repeated: “the most effective corrections have a phase where the majority of participants are convinced it has reached its conclusion”— this seems very well underway
Stalling in the 5000-5150 range is what I am looking for to validate this thought
3.
Last week the S&P 500 was down for six consecutive sessions and the Nasdaq nearly wiped out the entire annual advance having its worst week since October 2022 (18 months!)
Many hopeful bulls celebrating overnight tech reaction— meanwhile under the surface breadth remains negative with more stocks making new lows vs new highs, price still below the short term trend and momentum still in a negative state. 3/3 corrective criteria remain active.
I wrote last Friday and again on Sunday sharing thoughts of a bounce towards 5050-5150. This has well materialized, and in my outlook there is little bullish about this advance. The short term sentiment, which is almost always an overexaggeration will fool many otherwise. In less than a full week the market did an extraordinary job of convincing participants the pullback ended. Humble time incoming.
My call to 4800 or a more severe scenario of 4500-4600 is healthy.
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