Next week should mark the end of the retracement rally from the April 20th to May 20th leg down across all equity indices (Fib retracement levels shaded on charts) . So far 30 days of decline have been retraced by 10 days of rally, which is about right in terms of both time and price (roughly 1/3). SPX - Intermediate Term Trend Since the May 20th low I have been looking for a break of the 3800 support level to trigger the next acceleration down. That is still the case but in light of the robust rally off the lows we no longer have to wait for 3800 to be broken to confirm the arrival of the Wave 3 of 3 down. The first gap-down day with follow-through, likely well below 4000, will be the opening salvo of a Wave 3 for the ages, one that wlil not end before a spike panic low of SPX 2800-3000. As set out last weekend, that event can occur anytime between now and July 4th weekend. Despite the healthy gains seen in some of our option trades YTD, what is coming in the next 3-5 weeks will be the best option profits of the year, the best since TSLA in 2020. Do not miss it. IYR - 38.2% Retracement TSLA The 2-Day TSLA chart below sets out a near perfect 8 wave Elliott pattern, almost too perfect as it is not compatible with a bigger picture bear market in stocks. The low ($620) for share price may be in and if so, $2,000 is a reachable 12-18 month target for the next five wave advance. If price can straggle the up-trendline over the next 3-5 weeks, no matter what the rest of the market is doing, it's likely that the next leg of advance to new highs and beyond is in progress.
