SPX is struggling with the 2-hour Cycle Bottom resistance at 2001.88 in a probable retracement Wave (c). Yesterday’s bounce high at 2021.94 appears very near the 38.2% retracement level, using today’s new low as the starting point. The 50% retracement level is at 2033.50, not far from Intermediate-term resistance at 2039.72.

The December FOMC minutes will be released at 2:00 pm. Based on past performance, we may expect to see a surge of HFT-induced liquidity at that time, so it would normally appear that the retracement may not be over until then. However, with many of the dealer banks already short the SPX, the HFT computers may do the opposite of what is expected.

For those with dry powder, the retracement high may be the last chance to go short. With a new probable Head & Shoulders formation, the target for this decline is likely to be the massive Head & Shoulders neckline, currently near 1880.00.

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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