So far we are 100% on plan. With the obligatory breakdown below and whipsaw back above the SMA 200 SPX has filled another gap and held the next support area.
To keep symmetry with the ‘alt’ shoulder scenario this morning’s projected opening gap to 2820 should be about all there is to the bounce. Ah, but we have seen this movie before and it does not always make the sense we think we see in advance, so let’s also allow for a gap fill and upside test to the SMA 50.
The favored plan continues to be for a ‘bounce only’ and failure. That would be the case as long as SPX does not take out the SMA 50 and move higher than the right shoulder. But again, this morning’s projected open could satisfy a bounce objective as well.
Looking ahead, if the favored plan plays out the pattern’s worst case measures to 2500, which would test ‘higher low’ support as shown. Beyond that, if things get bad enough (or good enough for a would-be buyer) we can also bring back the old 2100-2200 major support area, which would take back the entire Trump Rally (only fitting, if the trade war is the correction’s engine).