SPX - Fork in the road

23 Kas 2022

Currently the S&P 500 can be seen in 3 views. I have a primary view and two alternates:

• First, the yellow path - my primary. After the FED comes out today, I think it'll cause a pullback in the market, but it won't be what everybody is expecting. I expect the pullback to complete a small correction from the top and pull back to around 3880-3900. Bears will get frothy and will be late to the short game. From there, a spike on "Black Friday" can take markets up to my target of 4150.
  
• Second, the green path. Difference here is an ABC correction vs a WXY correction. Minor difference, but this one sees us in a wave 3 going up to wave 5 at the same 4150 target in the first point. What I like about this count is the ABC in wave X for the first point doesn't look great as wave C into X doesn't look geometrically pleasing to me. What I don't like about this being a 1-2 is the move into wave 1 doesn't look super impulsive and looks corrective. That's why I put this as my second favorite count. Still with the same target at 4150 and probably on Friday.
  
• Last but not least is my 3rd count which isn't on the chart. It basically has the top being in ~4040 and we're in a bearish 1-2 pattern to the downside. I think this is the least probable at the moment. The move down from the top into the 38.2% retracement looks very corrective and doesn't look impulsive at all. If this is true, however, the target to the downside will come lower than we expect.
  

Ok, now what?
Now that we're at this critical juncture, a fork in the road, we have multiple scenarios that can play out here. Most of them have targets higher short term. Ultimately I think we're going to stay down here and possibly make a new yearly low before mid-December. Best case scenario, we're building a leading diagonal to create a start of a new major uptrend. Worst case scenario, we go down to 3300-3500 by EOY.

Our options analysis looking into the next few weeks shows the following:

Call/Put $ value and not Open Interest
11/25/2022: 92.2/7.8
12/2/2022: 85.7/14.3
12/9/2022: 75.9/24.1
12/16/2022: 98.7/1.3 (OpEx)
12/16/2022: 96/4 (normal Weekly)
12/23/2022: 68/32

18 Ara 2022

İşlem kapandı: hedefe ulaştı

It certainly didn't stay within the wedge but we hit my target that I put out there on November 23 and so far we've seen a rejection.