Both pattern recognition (Elliott Wave) and market oscillators (overbought/oversold) are forecasting a drop into the middle of December and based upon the former, this drop will be the most severe meltdown of the year. Reading social media this weekend, this outcome is not expected, instead a wave of FOMO is taking over, whether it be the unexpected election results or the subtle drop in month over month inflation, the previously feared, "market crash" is missing in action for most of the pundits. The psychology of third waves is that has they come when the public is least prepared, as in an option wipeout week like the one just past. The market clearly wants to go higher. Who would be stupid enough to throw bearish put position money into another leg down now? Exactly.
SPX Double Whammy Sell Signal
The EW forecast is for a Wave 3 of (3) into the next 4 weeks. At a minimum, the overbought/oversold oscillator signal should result in a retracement of the entire Wave 2 rally to at least 3200 (see the first Fib Extension level indicated on the right axis above). Similar set-ups are occurring in DJI, QQQ and IWM, with only slight differences in form and forecast.
Just one one chart and message this weekend, Let it soak in.