SPX has remained in a steady uptrend since the post election lows just above 2000 points. Soon after price broke above the Daily Kumo (cloud) and has never broken since….470 points higher….
There are bears hoping (pathetic) for a military escalation between South and North Korea… these people need a psychiatrist… and there are bulls that buy every MTFDip and up to now, they are winning… but my guess is not for long. Wave 4 Cycle degree might have already been complete or we just need one more high around 2520 before a big correction starts…..
The short-term levels we need to keep a close eye are at 2455 and at 2443. Bulls are in control as long as the price is above 2420, but breaking below 2443 will increase the chances of the bearish scenario.
The bullish case:
The index is making higher highs and higher lows since late August lows. Cloud support is at 2455 where we also find the 38% Fibonacci retracement of the rise from 2421. The 2520 target is derived by extending the next leg up to be the same size as the recent upward move from August lows.
The bearish case:
Explosive mixture in markets: the tension in Asia with the missiles, combined with another failure of POTUS to pass tax cuts, and the debt ceiling. Could the market start discounting the negative effects of the above to the market? The first signs will be the break of 2443 and eventually of 2421. This will also be the confirmation of the bearish scenario and the move towards 2360 at least.
