Some of these waves in the SPX sure look better from Bigcharts than they do with any of the futures contracts I cover. We had a nice spike to the downside just yesterday and now the second day, the SPX made a wild rocket move to the upside. Before noon our time, the SPX made a huge spike to the upside, with a huge open gap as well. That makes for a deadly combination, and I see it as a fake start to any mythical bull market we may still be in! If all the futures-related commercial positions were all net long, then it would be a different story.
Any rally like this starts out, by hitting all the “Buy” orders first. Now sell orders will be piling up below present prices, and the bulls will turn to instant bears once their stop-loss orders start getting hit. This can go on and on, and once the SPX support prices get close to that February low, then you will see investors really freak out! There are crashes,and then there are crashes and bear markets. Crashes happen at smaller degree levels. On large degree corrections you often get a bear market rally before the long bearish decline.
This is a Cycle degree bear market and it looks like we are going to get a bear market rally and then the longer drawn out decline. With the major indices it looks like we will get a Cycle degree flat, but, in the end, it might look like a zigzag! I might be posting more SPX charts in the future, as these charts are smoothed out a bit more.