SHORT-TERM TREND IS DOWN

Today's price action, following yesterday's new all-time high, suggests that we have a possible top of the $SPX at 1,597.35. From this recent high, the bonds have reversed direction upwards since yesterday's drop of $TNX below 1.8 (today it reached 1.719). The action in the bonds is bearish for stocks, as bond price action suggests a re-test of last July's $TNX low of 1.4.

This morning, JPM and WFC reported quarterly results: The market reacted with a down move, reached important technical targets at 1,580, and then retraced to 1,589 at the close (which can certainly go higher next Monday morning). Next week, C and MTB are reporting on Monday, which will tie in with today's JPM and WFC results. 

On the hourly, this wave from 1,597.35 down to 1,580, based on our quantitative modeling,  has a structure of 5 smaller waves.  Hence, we expect that after the completion of the current upwards move that began today at 11:00am, we shall experience another leg down towards 1,570's.

From a tactical point of view, a daily close above 1,602 will invalidate the above scenario.