Despite the red color of the candles in SPX, NDX and DJIA today, the odds remain bullish. No changes in the short term outlook.
The daily candles are likely the On-Neck formations that are viewed as bullish continuation. The prices of SPX and NDX are above 8 EMA, DJIA – just on it. The most likely scenario for tomorrow is one more consolidation day. However, a move up would be natural either.
SPX/ES retraced 0.236 of the recent rally, the necessary minimum for wave 4, and possibly started wave 5. No changes since the previous post.
Currently I am tracking three possible paths as shown on the chart above:
- Green (primary).
Wave 4 completed. Target for wave 5 – $4770-4810. Green rectangle.
This is well aligned with the SPX swing alert on October 18 for target – $4750-4800.
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 $4250-4300.
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