Base assumption is that the low near the open is a third wave low and that a fourth wave consolidation will form against 3259 or 3273 SPX before pressing lower toward 3194 tomorrow. If the bounce exceeds 3286, I will have to upgrade the morning low today to that of wave ‘(A) of [IV]’ and now in the early stages of a wave (B) bounce.
Getting follow-through lower from the gap lower in the S&P futures on the Sunday evening open. Futures are now in the lower portion of an initial zone of support for the first segment of a wave [IV] now. Since I would like to see a triangle to form to help run the clock, I would like to see lower soon as the first leg in a triangle is the deepest. That idea implies continuation lower today toward 3194.25 to 3188.25 late today or early tomorrow. The immediate question is if there are any bounces along the way. If there are bounces, they should appear at 3235.75 and 3214.75.
Bonds appear to be working on wave III of (V) of [C] of b. Resist at 165^14 and 166^00.
Treating the drop yesterday in SPX as an ‘A’ wave and the pop up the first wave in a ‘B’, thus the gap down is ‘b of B’ and think the push up to try to recover the gap from yesterday is ‘c of B’. Fair to try for at least 3367 though I think the chances are good for 3374 or even 3380 late in the day.
Bonds did make a new high over that of February 3rd today but I think it best to allow it to attempt to reach 165^21. What would the alternate be if bonds are not rising in a ‘b’ wave? Well, I would put the (b) at the low of in January of this year and say this is up in (c) of the large ending diagonal. The only problem I have had with that type of count is that wave (b) looks a little shallow on a weekly or monthly chart but the form would work. I’ll have more to say on this when I publish the weekly charts on Sunday.
Bonds still working on drifting up to resist at 164^06 and 164^23.
Think it is fair to shop for a lower high today after a bounce from near 3376. Initial resist at 3381 with more at 3389 and 3389. If it does set a lower high, aim for 3360 or 3351.
I know that I changed the main count in bonds over to one that calls for a test or new high to that of February third but the form so far looks pretty corrective post February 6th. I suppose it might turn into a tiny ending diagonal to reach up into 164^12 but if it drops under the daily moving averages at some point before a new high, I’ll switch back to wave ‘b” being set and work on getting a five count down into May or June.
Bias is to a new swing high over that of February 3rd in bonds while 162^14 holds as support so as to complete a fifth wave up from the January 2nd low.
As I type, S&P 500 futures are above 3376 thus expect a push up to test 3385 or to a new high at 3389. Higher of course is possible but I think a test of the high or new high is enough for a pattern completion. The next big weekly target is up near 3424 though I think that is a little too optimistic. Something to watch today is the reaction to the FOMC minutes at 14:00.