The S&P has fallen below its 200 day moving average, completed its final "C" Wave, and has formed the 5 waves down needed to get comfortable that a top is in place. The index has also broken down below its trendline and encroached on its previous ranges setting up a very high probability that the top in the S&P is in.
Currently, it is correcting its entire move down since the April high and will try to suck in as many bulls as possible. In reality, this is the point where bulls should be selling out of positions and adding shorts. A large wave 3 of 1 of 3 of 3 of 3 or however many 3rd waves we are in is forming and what this means is that it should be one of the biggest moves with very little relief and bounces to get out of longs in history. Notice on the chart below I have it knocking a few hundred points off the S&P in likely only 1-2 months time.
Bottom Line is the market has shown a pretty clear 5 waves down and is now correcting up in overlapping "corrective" waves that could potentially go as high as 1200 on the S&P (but it will not make a new high). Currently the S&P is flirting with the 200 day moving average, from the bottom, for the 2nd time in two days and a handful of times since breaking below it in mid May.
Now and the next week or two would be a good time to get out of longs and add to shorts!
Good Luck!
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