Now We Watch the Character of the Decline Over the Next Few Days

The cash S&P500 formed a downtrending price bar on Monday making last Thursday’s high a fractal, CIT (Change-In-Trend) and Level 1 Price Reaction Point (PRP). As such I have high confidence that it marked the end of the Elliott Wave up from the March 6 low. “IF” this wave was the C-wave in an Expanded Flat from the November 2008 low then we are going to make a new low (below 666) by May 7 before we go back above 833. If the current swing down from last Thursday does not complete by tomorrow (April 1) then we can have even more confidence in this scenario.

The next significant technical support area to watch for is 764-769. This area includes a previous swing low and PRP at 766.20 (March 20); Fibonacci confluence; a Gann target, and the intermediate moving average I like. There is only minor support at 773.

On the flip side, the next short-term upward move (which will most likely be here and gone by the end of this week) must not make a new high. The “I was wrong” point (stop loss if you will) remains at last Thursday’s high of 832.98.