It appears that SPX has declined beneath all its recent lows. Despite the sloppy, overlapping decline, one probable pattern stands out. Minute Waves [i] and [ii] may not yet be complete. If so, we may see a decline to the vicinity of 2112.00 (Wave [i]) before a bounce into tomorrow’s Fed announcement (Wave [ii]).

Should that be the case, the bounce tomorrow may be a strong one.

However, there may be a small deviation in that the next major support is at the mid-Cycle support at 2095.20 or the 7-month trendline at 2100.00.

These supports may often act as attractors until they are reached, then they may repel in a retracement rally. So we may see an extended Wave (b) going down to one of those support levels.

A retracement may go to 2138.00 to 2140.00. A 61.8% retracement at this juncture may be at 2138.62.

VIX appears to have completed Wave [i] of 3 of (C) and a breakout above Wave 1. There may be a retracement, but how far is to be determined.

TNX made its Wave (B) high this morning and may hover until the FOMC announcement. What is seems to be telling us is that there may not be an immediate rate hike, after all this buildup.

Regards,

Tony

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