For those that do not know yet, I track the market through a lens of market sentiment. And, in order to do so, I utilize Fibonacci mathematics to identify the main potential turning points within the market.
As I noted in my last update, the 2910/15SPX region was a resistance region for me at this time. Currently, support has now moved up to the 2865/85SPX region. If the market is unable to break down below that support, then the door has opened to rally as high as the 3011-40SPX region.
But, overall, I have a hard time viewing that the next bull market move to 3500+ has begun in earnest. Rather, I still think this rally is part of a larger degree corrective structure, and, yes, even though it can make a higher high.
You see, my original target for the last segment of the bull market rally was the 3011-3040 region, from which we came up a bit short. When that happens, we often see the market rally back to up to strike that original target, even within a larger degree “corrective” structure.
So, at this time, I still think that we will likely head back down to the December 2018 lows, but the exact path is what I question. Moreover, I have a hard time viewing us as already being within the final rally to 3500+ for many reasons, one of which being our Bayesian model calculating a 75% probability that we are still within that corrective structure to which I have been referring.
Lastly, I want to warn that there is not going to be any near term downside trend change until we see a sustained break below the 2865/85SPX support region. Should that occur over the coming week, then we can begin to make plans about the expected path down towards the December 2018 lows again.