Last Thursday's bearish "short term" reversal is still "in force", but it needs an end of week print below 1306.06; recall last week's SPX Spinning Top.
The structure of the current pull back is clearly corrective, strengthening the scenario that I am following of being the wave (4) of (C), but it needs confirmation of a lower high/low.
Daily Momentum, with the RSI breaching the steep December TL & the Stochastic sell signal, is suggesting that the SPX up leg off the December 19 low should be completed.
The McClellan oscillator has finally breached its December TL and broken down from a bearish rising wedge suggesting "distribution":
SPX has broken the TL1 but, yesterday it recovered above the weekly pivot bearish # = 1306.06 and it even managed an eod print back above the 10dsma.
If the assumed wave (4) is in progress we cannot rule out that price may unfold a Flat or a Triangle (Alternation Guideline), hence price could retest last Thursday's high. Also the "last trading day of a month + first trading day of a new month" bullish bias could delay another down leg.
But Friday`s NFP should soon regain the market attention.
If this scenario plays out then:
- Wave (4) should bottom in the range: 1289 -1280
- Wave (5) may reach the 1 x 1 target = 1376.55
Once the wave (C) is completed, a potential multi month top should be in place.
