SPX is not looking good. We are currently fully paid for the uptrend channel breakdown target. However, head & shoulder breakdown target is not met and the attempt to climb back above the neckline was rejected today. Any further breakdown could drag the index to $3700 - $3800 area which represents 21% drawdown and 1.382 fib extension area. I am hoping we don't pay head and shoulder breakdown measured move in full. What do you think? Do we see $3700 - $3800 before finding the bottom?
Good thoughts. Hopefully 3800 is the bottom. What is true regardless is the economic environment - energy, inflation, labor cost spirals, deflating real estate bubble, lax monetary policy, war in europe, high government debt spending and regulation - does not contribute in any way to growth in markets. It is a good time to invest in SPX at a discount, but it will be several years and new leadership to see significant uptick in the markets. The alternative is tragedy like Venezuela or stagflation of the early 80s. We can only hope for the better path. Be well, db