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SPX Update: A (Bearish) Look Out Across Several Markets

On Sunday, we played devil’s advocate a bit and tried to tear down the preferred count.  We’ll continue watching the alternate possibility presented there, but we’re going to focus on the preferred count until the market suggests we shouldn’t.

The preferred count continues to believe that the market is in the early stages of an important trend change, and I’ve assembled some additional supporting evidence in favor of this view.  The first chart I’d like to present is the London FTSE, which has now overlapped its potential first wave.  While this doesn’t rule out higher prices in the future, it does substantially lower the odds on any long-term bull counts.

Next is the German DAX, which also looks bearish.  It appears that the preferred count for DAX, presented a couple times over the past month, did a good job anticipating the turn in that index.

Silver appears to be breaking down from its uptrend.

Next a look at several indices on the same chart.  NYA, WLSH, TRAN, and INDU have now all whipsawed their recent key breakouts.

Let’s take a quick look at the preferred count in the big picture view.  Keep in mind that the next bottom (blue target box) could mark ALL OF wave (i), or only mark the bottom of wave 3.

The same count, shown on the 5-minute chart below.  Trade above 1392.92 would eliminate the 4th wave interpretation and indicate that a correction at higher degree was unfolding.

Finally, a look at the alternate count at next highest degree.  The first target under the terms of this count was reached yesterday.  The 2nd target below might line up with the black count shown in the chart above — however, the market is reaching into territory where bears need to be very cautious of a larger rally developing.  If the first target below is exceeded, and the second target missed, that might argue a bit in favor of the preferred count.

In conclusion, there are even more bearish signals appearing across markets, adding some degree of confidence to the preferred count.  Unless bulls can pull a major stick save here (wouldn’t be the first time), it appears that a larger trend change is beginning.  Trade safe.

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