S&P 500 Primary Cycles
Note:- there is still a Minor bear pattern that is lagging from the August breakout @ 2027.
If we subscribe to the Dilernia Principle of Break & Extend pattern, then price trend needs to reach the lagging Monthly support zone, which currently resides around 1921 (blue). (Previous Report)
This Week's dramatic sell-off wasn't unexpected, based on the Dilernia Principle of 'Break & Extend'. This week's action now completes the pattern from the 2015 breakout @2027.
Going forward, we could see some computer generated buying support around 1921 from next week, (validate support using patterns in my book) and see price rise up into the 2016 50% level, which is more than likely going to form resistance for a few many months.
However, US markets are now officially in a Bear Trend, and often those trends follow a 2-period cycle, and that trend is going to look for the next Primary Support zone @ 1849.
This pattern now has all the hallmarks of forming a 'double bottom' around March 2016.
