In bull markets the surprises come to the upside. The reverse for bear markets.
On 12/28/16 there were several short term factors that suggested a rally, the SPX opened up and the rally died in one minute.
The subsequent decline has brought the SPX down to support in the 2248 area.
The decline from the high at 2273.80 looks like a nearly complete impulse wave.
The latter part appears to be forming an Ending Diagonal Triangle. If so the maximum downside is at SPX 2247.30 a break below this level will open the door for more downside - a 20 point drop today could be possible.
Assuming the SPX bottoms in the 2249-2248 area the next rally would probably be another wave "two" up. Wave "twos" usually retrace about .618 of wave "ones" in this case around SPX 2263 - 2266. If there's a rally it could last one to two trading days.
Mark
On 12/28/16 there were several short term factors that suggested a rally, the SPX opened up and the rally died in one minute.
The subsequent decline has brought the SPX down to support in the 2248 area.
The decline from the high at 2273.80 looks like a nearly complete impulse wave.
The latter part appears to be forming an Ending Diagonal Triangle. If so the maximum downside is at SPX 2247.30 a break below this level will open the door for more downside - a 20 point drop today could be possible.
Assuming the SPX bottoms in the 2249-2248 area the next rally would probably be another wave "two" up. Wave "twos" usually retrace about .618 of wave "ones" in this case around SPX 2263 - 2266. If there's a rally it could last one to two trading days.
Mark