This is a speculative chart at the moment because none of these patterns are complete.
SPX is drawing an ascending broadening wedge and we can expect a break down.
SPX is also drawing a bullish butterfly pattern (78.6% on B, 161+261% on D) at 3480. So we could expect a fall and a bounce on 3480, around the 200 days MA (nice coincidence).
Secondly, a touch on 3480...
The current trend of yield curve (10-02) looks very similar to past pre-recession eras.
We heard many times that a negative yield curve means recession. But that's not the case : recessions occur with widening spreads after touching ZERO.
In the past, it was a signal of systemic recession with high probability.
I added a correlation indicator to SPX. We can...
On a log scale, i can see US10 to follow a trend-line. We are on it.
Most dips on US10 were stock market dips (1998, 2003, 2008).
Be careful at shorting indexes if the US10 yield goes back up.
PS: I tagged it "short", because if yield goes up, it's a short on T-Bonds.
We will have a dead cat bounce up to ~3200 to activate a butterfly target at 2300. Right on previous major LOW. We need AT LEAST 3200 for this to work.
Then another dead cat, and a fall to 1650, to complete a shark pattern.
Once we reach 1650, market could range between 1650 and 2500 for years.
It's blowing my mind how the 161% extensions (golden number) are...
Here is all patterns i can see with current HSI structure.
At 31600, there is a bearish gartley (78%).
At this exact same level, there is a 5-0 pattern (161% extension) which would lead to a ~50% drop in a form of AB=CD .
I tend to think, when fibs are nicely aligned (confluence) the probability is high to touch the level.
HSI could rally up to 31600, falls down...