Watching for Next Major Cycle Low
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What a week with price first rallying up to touch the 5600 area on the Emini S&P 500 before crashing down to new local lows. In what felt to me like the volatile action from 2022, we had a one-day move completely reversed and more the next day, and it just kept on going.
It did not feel like there was much liquidity in the system, not many shorts to cover, just steady selling action lower. I was looking for a major cycle high back in mid-July, but the market went about it in a very sneaky way. Internals stayed strong while price action kept deteriorating over time, accompanied by one day bounces that felt like things were turning around. A
As I mentioned above, I remember this type of action from 2022, almost untradable on a swing basis. Having said all that, looking at the cycles, if mid-July was the major cycle high and it is looking like that was accurate, then the next major cycle low comes by mid to late August. This means that we likely have more downside ahead of us mixed in with one-day bounces.
Regardless, we have to be ready to buy that cycle low in a few weeks. On price, 5340/20 is support for tomorrow and below this, 5280-60. I think we might have a few days of sideways action ahead of us in the coming week before trying for lower again.
