S&P has reached the much-anticipated 1700 level and I believe the first reaction will be a price rejection and a downward correction. There are two very possible wave counts that I have in mind and both expect a downward correction at least towards 1680-70 area.
In the daily chart as shown above, the entire move from 1560 may have completed 5 waves up and we could be expecting a correction even towards 1600. If however we take a closer look in the hourly chart we observe an alternative wave count that implies that only wave 3 has ended and we should expect a wave 4 correction and then a new upward wave 5 to reach 1710-20.
In the chart below we label both wave scenarios. The yellow labeled scenario implies that the move from 1560 is over and we are starting a downward correction that could push prices through to 1630-10. If however only wave 3 has ended (alternative white labeled wave count) then we should expect a wave 4 to unfold towards 1680-70.
Concluding we are neutral to bearish in SPX. As we mentioned in a previous post, bulls have much more to lose than bears. Breaking below 1690 will confirm the start of the correction that could go to 1670 or even 1630. Whatever scenario plays out eventually, we believe that bears risk less at this price levels.
As always, thank you for taking the time to catch up on my thinking.