In that post, I indicated that there was a chance a big down wave setup could be built, but I was not personally there on the setup. February 20, Extreme Bull Update.
I am now there on the setup and I have a clear marker which I believe delinates between the two binary scenarios. Specifically, on March 14 (1 trading day after the low identified in the chart above) we put in a day that on SPX (not the ETFs) was below the prior 12 daily highs. This is likely the end of a wave 2 (Extreme Bull Scenario) or the beginning of the hard down move into April 4-7. Accordingly, if we reverse at take out that high (SPX 1852.44) the down move is upon us. If we do not take it out by Thursday or Friday at the latest this week, I will move the Extreme Bull Scenario back to the primary and be looking for an April 6-9 high in the SPX 1900s.
For now, I think it will reverse. However, I do not have crystal balls and what I think really does not matter. So, I will be watching the time and price marker I have identified going forward.
From an intermarket standpoint, USDJPY 101.19 is key support for a further risk on move (assuming the correlation with equities continues), which I have been talking about the past weeks. We are hovering above that area this week. Here is the Weekly USDJPY chart, which is still showing declining 13 EMA, declining MACD, is below its 21 EMA, and belwo both its Weekly and Monthly pviots (the "P") on the chart. This is Presently Bearish, and why I lean for an equity reversal in the next two trading days. This can be changed, and we have the equity marker to know if it has changed, but for now it is bearish and correlated to equities. That is the explanation for how I chose a side at the binary moment.
There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due dilgence, read the disclaimer, and make your own investment decisions.
Peace, Om, SoulJester
