Notice how a large Neckline (purple) on the SPX also ties to this 4020 region.
Interestingly, the mid-June decline occurred after the SPX seemingly reclaimed the Neckline.
But, when it broke back below the Neckline all hell broke loose.
This proves the validity of this Neckline-- now at the 4020-ish region.
Should the SPX pull itself above the Neckline and hold above it, it theoretically opens the door for an extension higher.
However, the lesson from early June when the Neckline was reclaimed looms large.
If the SPX can get traction above the Neckline and 4020 ish, it can buy some time.
If not, it is vulnerable sooner rather than later.
Either way, the next vicious leg down is on deck.
The more pundits ask “Is the Bear market over”, the more bearish the picture looks.
The Street seems very optimistic about the notion that the bear market is over.
Tomorrow’s report will examine another period where the Street was very cautious in the midst of consolidation after an explosive rally. That consolidation led to a rocket higher.
Now the Street is very hopeful following a diabolical decline.
The likelihood is a mirror image fold-back is on the table pointing to a waterfall decline.
The issue, as always, is a matter of timing.
That’s the question we will address in tomorrow’s report…TIME…of which the aforesaid mirror image fold-back helps to answer.
For the bears, it’s simply a matter of pay me now or pay me later.