The market tanked yesterday, but it failed to hit the 692 FP and (and the 7063 ES FP)... and it failed to hit the short term upside FP at 749.70 on the SPY from last week. They never make it easy when it comes to the hitting of the FP's, as I've seen this pattern before where a fake print is put out weeks or months in advance, and when the market starts to get close to hitting it, it stops shy and reverses the other way for awhile. Then later comes back and hits the FP to fulfill it. What does that mean you ask? It tells me the short term low is in (an A wave) and we are going to rally into mid next week (the FOMC on the 17th) where we should easily hit the 749.70 upside FP on the SPY that I posted a chart of on X a couple of days ago. Below is that chart...
However, today... before the open, we have the CPI number coming out. Now it could be used to cause another drop in the market to retest the lows (and possibly flush hard to the 692 FP), but I think it's going to be used to squeeze the bears really hard. It's a wildcard, but it's possible that between the CPI starting the squeeze, and the IPO of SpaceX this Friday, we could see the 787.13 FP on the SPY hit into next week. Yeah, that's a crazy call, and I agree. But if you want to destroy the bears that's the move I'd do. More likely though is that we only go up to make a lower high, or slightly higher (to hit stops on bears that short the double top), like to 7700+ into next Wednesday.
I really don't have a lean here on whether or not we make a lower high, blow off high to 787.13, or slightly higher high... but I do have a strong lean that the next best shorting spot will be on the 17th, which just happens to be the FOMC day as well... but that's not my reason for predicting that day. It's more about the cycles and while the window is the 5th to 15th we've already did the first drop early by topping around the 2nd/3rd, so I'm targeting a late top for the next high. I wasn't really thinking about the market having two large drops, but it's now pretty clear that we'll see another one before the bearish window of time expires (it goes until mid-July). Here's a chart of the path I think is coming...
Now again, I don't know about how high the coming move up into the 17th will be, as it could be a new high for a wave 5 that I've been looking to play out for awhile now. Or it's a lower high, which would be a B wave in a wave 4 down. Then the C wave would follow afterwards and bottom most likely by the end of this month. Then some up's and down's for the first half of July before the really strong rally up starts, which could then reach 8000 or more in the months that follow. Bottom line here is that while this recent drop went deeper then I expected (meaning I missed shorting it) there's still another great opportunity to short next week.
Thursday Update
The additional decline yesterday, after I wrote Wednesdays update, opens the doors for the 15th-17th turn window to be skipped and the next turn window of the 24th-26th to be the top. I was hoping that we'd start back up yesterday and squeeze into the FOMC next Wednesday the 17th, where a double top should happen. I still lean toward a retest of the current all time high before the next big leg down, and it really should make a slightly higher high.
This made me believe that the 24th-26th would be a low (ideally the 26th, which is my lean), but that seems less likely now. Instead, we'll probably get a 50% rally into the 15th-17th window (wave 1 in the final 5th wave up?), then another pullback of some degree, but not huge... like wave 2 that traps shorts. Then a wave 3 up, 4 and 5 to finish the 5th wave into the 24th-26th where a slightly higher high happens. Once that occurs the bears will give up on any further drops and will be calling for 8000 or so.
But... the bearish period last into mid-July (and could extend into late July), so there's high odds of another drop that reaches (and pierces the 692 FP on the SPY. The 6800's on the SPX should be entered before the real low is in... and then we rally to 8000+ into September as all the bears are fully short again calling for the March 30th low to get hit next. But it should NOT happen, as the FP should be the low. Of course it can get pierced by 25+50 SPX points, which is why I think we'll enter the high 6800's at the final low, but that should end everything for the bears and be a HUGE buying opportunity.
So... my thought here haven't changed, but the timeline has be extended. I still lean strongly toward a retest of the current all time high before the next big drop. I said previously that I thought it would happen on the 17th, but looking at how weak the market was yesterday I don't think that will happen now. I think the market will need more time to shake out the bears and lure in the bulls, so that's why I'm thinking the 24th-26th window will be where we see the new high.
Have an blessed day.
