Good morning gentlemen: the SPX/MKT continues to trade within a macro & daily corrective cycle and is likely to remain within a corrective cycle for some time given the elongated prior UP trend.

Certainly, there will be “tradable” rally’s along the way, but for the most part the primary trend is lower before “materially” higher in the S/T-

With that said, the question now IS…  what’s next ? higher or lower?

SPX R1-R2=2744-50- This level represents a BIG weekly pivot that I think will NOT be taken out on the UP side in S/T- (meaning this week or next) and is likely to set up a move back to lower end of the range, OR perhaps, even lower.

SPX R3=2790-97- LOW probability but possible on a surprise outcome on elections. *Would fire another bullet here on short side.

It’s a tough call next 1-2 days on whether the SPX/MKT will move higher before moving lower, OR just roll over like it did from the 2870 area in Oct.

One thing is for sure- the “daily” DMP=.63/.49 reading next 2 days is VERY bearish (3:1 SELL/BUY signals) – see below- Getting worse tmrw (11.7.18)-

TMRW DMP

**This tells me that there are a lot of residual SELL signals pent up in the system and the algos will likely be sellers vs. buyers…

So, taking into consideration the position of the SPX/MKT in price/TIME coupled with a LOW DMP reading, the sum of the T/A parts suggests limited UP side follow through next 1-2 days which will most likely precede an upside pivot around 2744-50 that sets up a move back to lower end of thane range (2600-ish)and perhaps maybe even lower-

Traders/PM’s are advised to limit their UP side expectations for the MKT and assume the MKT pivots from R1-R2- OR perhaps R3- today/tmrw and moves lower once again before anything further on the UP side in S/T-

2 day trade: Since the election results could “skew” the move one way or the other tmrw- we think it’s a “Sell the news” event in either case, So we going to set up tactically to Sell some today @ R1-R2this am, and then Sell some Tomorrow on any UP side surprise. This trade set up will likely take us into Nov. 9th-12th where we see some BUY signals coming in that suggest a pivot LOW in TIME…

 

Adam Lorraine-

Technical Analysis Specialist-