BE READY FOR A VOLATILE WEEK
SPX remains vulnerable of embarking in a larger corrective pattern, without endangering the intermediate trend, with a Zig Zag / Double Zig Zag in which case I expect a target in the range 1555 (0.382 R) - 1502 (200 dma).
As I have mentioned in the weekend update the absence of an impulsive pattern from the June 6 low should not allow an immediate resumption of the uptrend instead, so far the internal structure of the pullback from the May 22 high is suggesting a likely downward correction with a pending wave (C) down.
If this is the case price is now unfolding the wave (B) with one of the following possible EWP:
- "Bullish" Triangle. If price is forming this contracting pattern (we are now in the wave c), the following thrust should establish the wave (B) of the suggested Zig Zag.
Following the thrust, if the next down leg is corrective and establishes a higher low then the option of the large bullish Triangle will "revive".
- "Bearish" Triangle. If price is forming this Symmetrical Triangle (we are now in the wave d), once it is completed, the following thrust down can conclude the correction from the May 22 high.
- From the June 6 low price could be unfolding a Double Zig Zag. This pattern could pan out only if price is now forming a bearish rising wedge.