Upside in the S&P 500 is limited before a pullback occurs.
All three of the most probable scenarios resolve to the downside.
If you are looking to go long, be patient, better days will come.
The S&P 500 broke over the high made on February 5th this week on continued technical divergences, decreasing volume, and declining advancing issues. This last Sunday I wrote:
First, keep in mind that B-waves and 4th waves are the most difficult market action to trade, and for many going to cash and awaiting a capitulation low is as good a strategy as attempting to trade various legs of the correction. For those who are looking to be more active, here are the potentials.
Of the three most probable scenarios, we still think the most likely at this point is option 1, and having broken up this week are looking for a price target from current levels up to the 2765 – 2785 to contain blue A-wave to turn down. A sustained break of 2730 would be the first strong indication that the A-wave is complete and we are now in the B-wave. See chart below, still in the A-wave territory. A break over the 2802 region would be reason to toggle over to the Alt. B count as most probable, suggestive that the SPX will fast forward a direct route to complete all of the B-wave.
Also supportive of the large ABC count as being active is the chart patterns for Apple Inc. (AAPL), Alphabet Inc. (GOOGL), and Amazon.com Inc. (AMZN), provided by Time Price Analysis. When the chart patterns for individual stocks match that of the S&P 500, it helps provide clues as to which count is most probable
Apple Inc. (AAPL)
All of the most probable alternatives resolve downward at some point in the very near future, so if you are exiting longs and looking for where to re-enter, this is a good time to be patient.
Active investors should be focused more on the short side.