As of Friday, it appeared that it appears that the retracement may have finished at the 38.2% level. In fact, yesterday the SPX made what appeared to be a five wave impulse to move to the downside, indicating in a decline may have already begun. However, Ms. Market had other ideas, among which was to retrace near the 61.8% level.
The retracement appears to be over. However, the SPX is above all this support levels, most notably the 50 day moving average at 1230.99. A breakdown below those levels should be our signal that wave three is commencing.
The cycle model suggests that a new low may be made as early as December 29.
If we could name a technical call for today's activity, it would be the VIX. Whereas the low on December 13 appeared as a potential declining wedge, today's new low actually identifies this as an ending diagonal pattern, which portends a very bullish outcome in the VIX. Currently the VIX must breakout above its 25.38 high to confirm the reversal. In doing so it will also break free of the declining wedge pattern. It is uncertain whether the VIX will attempt a new low at the trendline before attempting a breakout.
The cycles model suggests a high in the VIX between December 27 and 29.
XEU retested cycle bottom resistance at 131.17 this morning, but could not close above it. The cycles model suggests the decline may continue until December 29.
The retracement appears to be over. However, the SPX is above all this support levels, most notably the 50 day moving average at 1230.99. A breakdown below those levels should be our signal that wave three is commencing.
The cycle model suggests that a new low may be made as early as December 29.
If we could name a technical call for today's activity, it would be the VIX. Whereas the low on December 13 appeared as a potential declining wedge, today's new low actually identifies this as an ending diagonal pattern, which portends a very bullish outcome in the VIX. Currently the VIX must breakout above its 25.38 high to confirm the reversal. In doing so it will also break free of the declining wedge pattern. It is uncertain whether the VIX will attempt a new low at the trendline before attempting a breakout.
The cycles model suggests a high in the VIX between December 27 and 29.
XEU retested cycle bottom resistance at 131.17 this morning, but could not close above it. The cycles model suggests the decline may continue until December 29.
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