S&P 500: Macro Update: Two Bearish Scenarios

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We have two alternative counts in SPX. Both are bearish.

Let’s starts from the (i) Optimistic Bearish Scenario:

S&P 500, Cash Index, Daily chart

Under the Optimistic scenario, a drop to 3,350 would complete wave (v) of (C) and consequently complete the whole large (A) down, (B) up, (C) down structure that started at the top made in Jan’22.

That level 3,350 is a very strong confluence of:

– 138.2% ext of wave (A) down, and

– 176.4% ext of a micro wave (i) down of (C) down.

Now lets look at (ii) the Very Bearish Scenario:

S&P 500 cash index, Daily Chart

Under the Very Bearish scenario, SPX is about to start a very strong decline in subwave (c) of wave (iii) down targeting 3, 150 with probable extension down to 3,000.

I like the first Optimistic scenario more. In any of those cases, 3,350 is a very strong support.

Let’ slook at the micro 15 min chart of SPX:

S&P 500 cash index, 15 min chart

We can count the -a-b-c move down as a micro wave -i- down.

That subwave -c- of wave -i- down can extend down to 3,630 at Friday open.

Note that this is where the upper edge of the Cyan box is located, the unfilled gap up. The upper edge of an unfilled gap up normally acts as a strong support. Under that scenario an open with a gap down on Friday morning will be followed by another painful directionless whipsaw, a consolidation in a micro wave -ii- up.

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