SPX, NDX and DJIA formed Spinning Tops. Of course, for them to become the actual tops they would require confirmations. Some red candles tomorrow that close below todays lows would do, especially if RSI drops from the overbought area.
SPX/ES extended 2.618 off the September low and I view this level as a possible pullback zone.
Currently I am tracking three possible paths as shown on the chart above:
- Green (primary).
Wave 3 completed. Expected pullback to $4560-4620 in wave 4. Green rectangle.
Wave (1) completed. A bigger pullback to $4450-4600 in wave (2). Red rectangle.
The correction that started in September is not over. Possible wave C, targeting $4200-4500.
Of course, as the bullish odds are never zero, there is a chance of continued rally. The indices would need to close at a new high for that. Odds – rather slim.
Let’s see how the indices move tomorrow.
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