When the dollar make major moves (we all know its been skyrocketing) the printed price evaluations on the SPX is can be distorted relative to the actual underlaying sentiment and momentum which is hidden/obscured by the dollars radical moves.
We can check this and remove the dollar effect on the SPX by dividing the SPX by the dollar. We can now see the actual ATH was on 11/09/21 (not 01/03/22) and the "actual low" was 7/13 (not 6/17). Clarifying these highs and lows helps to distinguish a likely Elliott count.
The most likely 3 month structure starting 6/18 is a A-B-C expanded flat. Furthermore you can see when the dollar's effect is removed the SPX actually bounced off the pre-covid high, which would be a VERY "normal" reaction to expect. So conclusion all of this is "normal"
Moving forward : There is a chance this is simply wave A, of the next larger degree and the counter trend rally could continue for a new monthly high. OR there is an almost equal possibility we are " done and dusted" and the market could simply head lower in a very impulsive wave 3 / wave C manor. For various reasons I personally think Market makers want more of your money , so there is a slightly higher probability the countertrend corrective rally will continue for a new monthly high before price heads down for MUCH deeper lows.
We can check this and remove the dollar effect on the SPX by dividing the SPX by the dollar. We can now see the actual ATH was on 11/09/21 (not 01/03/22) and the "actual low" was 7/13 (not 6/17). Clarifying these highs and lows helps to distinguish a likely Elliott count.
The most likely 3 month structure starting 6/18 is a A-B-C expanded flat. Furthermore you can see when the dollar's effect is removed the SPX actually bounced off the pre-covid high, which would be a VERY "normal" reaction to expect. So conclusion all of this is "normal"
Moving forward : There is a chance this is simply wave A, of the next larger degree and the counter trend rally could continue for a new monthly high. OR there is an almost equal possibility we are " done and dusted" and the market could simply head lower in a very impulsive wave 3 / wave C manor. For various reasons I personally think Market makers want more of your money , so there is a slightly higher probability the countertrend corrective rally will continue for a new monthly high before price heads down for MUCH deeper lows.
Comment:
We Already have small entries on a few safe longs, IF the markets corrective rally continues, and we start to push up (I do think this is tradable) BUT very mindful of the current structure and pattern we are in.