US Dollar looks to be bottoming out Array ( [cookie] => 88f86a-bc2148-6126f9-f188f7-b09cf2 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 1 [max_usage_crypto] => 1 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 1 [role] => subscriber [visitor_id] => 556868 [reason] => [method] => ) 1
Incredibly enough, SPX has now given up over 300 points just since Tuesday’s intra-day peak in S&P Futures following this week’s CPI report, or around 7% from those highs at 4180 just three days ago. This decline certainly has proven lightning fast for a normally bullish December. However, there were ample warnings regarding breadth deterioration, defensive trading that certainly discussed the possibility of yet another trading top just as the 80-day trading peak began to roll over. Overall, I do not suspect this will be a straight shot lower into year-end. Technically speaking, there is evidence as of Friday’s close that a bounce is approaching. However, given the nature of this week’s selloff, there still looks to be a further window of weakness into late next week before a final week rally. Targets for a decline could materialize near 3725 which would equate to a 61.8% Fibonacci retracement of the rally off October lows. One should consider that bounces early next week likely won’t recoup more than 50% of this week’s selloff before a bit more weakness. Yet, my short-term cycle composites still show a good chance for a late December rally. Overall, I feel that volatility will likely continue in the next week as this past week, similar to 2022 as a whole, has proven anything but normal.
SPX wave structure shows a 5-wave decline from Tuesday’s peak
I normally find it a huge value-added to study intra-day price action for clues of predictable patterns and wave structure which often can be helpful for projecting targets not to mention support and resistance.
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