SPX might push to new monthly lows into next week, and then bottom Array ( [cookie] => 036ab8-6547a6-cf8512-7b95b8-269f28 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fundstrat [visitor_id] => 591084 [reason] => [method] => ) 1
Note: There will be no publication tomorrow as the markets will be closed in observance of President Carter's day of mourning.
SPX is still technically within its bearish short-term consolidation pattern that began nearly five weeks ago, and the last couple of days have produced even more short-term bearish pressure, which could allow for a quick move to briefly undercut January lows. Overall, my thesis is that a short-term low is approaching, but still might take another 2-3 days before prices reach support. Thereafter, this should allow for a bounce into the Presidential inauguration. However, the short-term breakout in Treasury yields and US Dollar remain bearish factors for Equities, and some evidence of Yields peaking will be important to trust any bounce in the Equity market. Bottom line, given Technology stocks like AAPL and NVDA are both nearing support, I suspect that SPX might attempt a bottom by early next week and begin to bounce into mid-to-late January. However, the extent of the breadth deterioration has proven severe in recent weeks. A rapid about-face increase in market breadth will be necessary to avoid February's weakness in Equities, which is increasingly likely given the extent of short-term breadth deterioration.
The near-term picture still appears negative, and this was reinforced by the hourly SPX wave count which is apparent as of the end of day close from Wednesday, 1/8/25.
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