Pre-Election Selloff - Market Update

Last week, we highlighted Cycle Bracket, Elliott Wave, and Intermarket warnings, all coinciding with weakening market conditions. You can read the full analysis here. These warnings were valid as the market is beginning a pullback into the US Election.

Primary Cycle Bracket

Let’s start with the Primary Cycle bracket analysis. We can see that the 10/17 high occurred after the cycle bracket was about 2/3rds over. This makes it a bullish right-translated cycle, however it is the time for a decline into the cycle bracket renewal. The Half Cycle SMA (blue) did not hold as support so the next stop should be the Primary Cycle SMA (green) around $568. If that does not hold, the 50-Week SMA is at $551. In the low-probability case that the SPY goes down to the 4-Year SMA (orange) that would bring us down to $475. Also note that the CCI indicator is below 0 signaling a bonafide downtrend. The Slow Stochastics also called the top pretty well and tells us that there should be more downside before it gets oversold.

Elliott Wave