Short-term trend is down

Both our quantitative analysis as well as trading indicators suggest a down trend.


Price action today displayed a normal 50% retracement, in a form of an a-b-c, almost to the penny, of $SPX's leg down from last Thursday's high of 1,597.35 to yesterday's low of 1,552.28.

The bonds are subdividing into upwards waves, with $TNX remaining below the critical 1.8 level.

We expect the market to turn lower again in the near future, once this upwards retracement is complete. We can not exclude the possibility, however, of further upwards movement on the $SPX(could reach 1,586) as part of this retracement (low probability).

Next down-trend target is 1,505 - 1,530.

A daily close above 1,598 invalidates the above prediction.