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SPX: Follow Up of the Short Term EWP

Yesterday I had a problem with one of my computers hence I could not dedicate much time to the markets so today's technical follow up will be a brief one.

As I mentioned yesterday in my opinion the corrective rebound off the November 16 low is not over yet as long as bears do not reclaim the 200 dma.

Judging from the internal structure of the pullback off last Monday's hod it seems that they will not be able.

Yesterday I suggested that price could have completed the first down leg of a Zig Zag, I was wrong since instead of a bounce, we had follow through to the down side but with an overlapping move which ended with a small wedge close to the 1403 support line.

The pattern so far can be labelled as a Zig Zag (abc).

If price is unfolding a wave (B) it is still too short to be considered done hence the pattern would require a larger Zig Zag with a potential target in the range of 1393 - 1385.

If this count is the correct one then the rebound should fail establishing a lower high:

SPX 30-Minute Chart
Larger Image

This is probably the "obvious" scenario which should result in a break out above the November 6 lower high = 1433.38

This pattern could allow a revisit of the September 14 high.

SPX Daily Chart
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Since I don't trust this market I want to remain open minded.

Yesterday price action resulted in a daily Doji, which could surprise the bears with a different pattern such as an Ending Diagonal:

SPX 60-Minute Chart
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If this pattern plays out it would strengthen the larger picture (Bearish) wave (B) scenario since we could even have a failure at the November 6 peak = 1433.38.

As I posted yesterday on Twitter/StockTwits, it is worth monitoring the KBE etf since the internal structure of the pullback off the November 23 high is suggesting a sideways corrective pattern that could result in a bullish Triangle:

KBE 30-Minute Chart
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