Trend is down

We have experienced a 2-day bounce here, as the market relieves the oversold pressured from Tuesday's close (RSI < 30 on the hourly at Tue's close).

The bounce was 19 points on the $SPX, in an a-b-c manner: 1,627 - 1,641 - 1,631 - 1,646, with a=c= 14 or so points.  This a-b-c pattern is clearly seen on the hourly using Stoch(14,3,3). Hence, the bounce is behaving so far as a correction of a down-ward wave.

So what is this down-wards wave?

We had a peak at 1,709 on Aug 2, followed by wave A down to 1,684 and wave B upwards to 1,700 on Aug 7-8.  From 1,700 we had an 18 point drop to 1,682 (Aug 13) that we call wave-1 of C down, followed by an upwards rapid retracement to 1,697 (a 75% correction) on the same day: wave-2 behavior. Wave-3 ended at 1,660 on Aug 15, and after a very short wave-4, wave-5 reached the projected 1,640 target. That was Wave-1 of C.

Wave-2 (upwards) spans from 1,639 - to - 1,669 on Aug 22, a 30 point upwards correction, or 50% of Wave-1's drop from 1,700 - to - 1,640. Book perfect.

From that point on we experienced an impulsive drop to 1,627, a characteristic of wave-3 behavior. The 1,669 - 1,627 drop (42 points) is called wave-1 of Wave-3 (down-wards), followed now by an upwards wave-2 correction since Aug 28 of thus far 20 points (or 50% of the 1,669-1,627 Wave-1 drop). This wave-2 may have a little more upside, with a 75% of 42 or 1,659 on the $SPX.

To this end, the market turned down this morning after reaching 1,646 and touched 1,637. Hence this wave-2 may be over, may be not - we do not have confirmation that it ended yet.

All and all, our hourly and daily indicators point down and the weekly chart as well.

Next major down target is 1,580's.

A daily close above 1,670 invalidates our model and projection.