The four hour S&P 500 (SPX) chart is the main focus right now and it is highly probable a full 9 count TD Buy Setup will record by the end of the day. As it stands now, the current bar 8 made a lower low under cutting bar 6 and bar 7. This has made all the necessary requirements for price exhaustion aka TD Buy Setup ‘perfection’. Also, as I am writing this, the low of the day is at SPX 1598.23, just a few points shy of the main confluent target at SPX 1593-1594. For tomorrow, some kind of rally should begin (if not now) and it will all depend on tomorrow’s US non-farm payroll jobs release. Any negative reaction of the number should be viewed as a buying opportunity unless it prints outside of consensus. A fair benchmark would be anything north of 190,000 or south of 140,000. If the equity markets do not bottom tomorrow, I’ll try to address it then. The classical breadth indicator, the McClellan Oscillator, is shown above. Another one I use is the Wayne Whaley derived 5 day average breadth reading. Both flashing extreme levels. They only get more extreme if a systemic event occurs.
Looking to get long tomorrow for a counter trend rally and see where it goes. Overall outlook is still bearish but if the daily TD Buy Setup loses its count, then some adjustments will be made. (updated mid trading day)