Breach below narrow and rising trend-channel confirms decline to 2850 or above
On February 2, 2020, we made the following comment:
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On Oct. 3, 2019, at 2855.94, the SPX started a five-wave advance pattern that formed inside a very narrow and rising trend-channel. A breach below the channel would confirm a trend-change. On January 22, at 3337.77, the SPX reached a record high and topped. And between Jan. 22 and Friday’s 3225.52 close, the SPX declined 3.36%, breaking below the trend-channel and confirming the change in trend. If today’s labeling is correct, from Friday’s close, the SPX should decline at most 11.50% or to a level near the 2855.94 Oct. 3 low, as follows (chart below):
-The SPX is in wave 4 down. The downside target for wave 4 is 2900.
Currently, we are forecasting a wave 4 down to 2850 or above. The coronavirus headline scare, at a market top, is relevant enough to shave off about 400 points of the SPX, but not more.