S&P500 Dead-cat-bounce before one last bottom?

Our last call on the S&P500 (SPX) couldn't have gone better as the Bearish Megaphone pattern we expected (April 05, see chart below) was eventually materialized and easily hit on Tuesday our 5050 Target:


At the moment the index is below the 1D MA50 (blue trend-line), which has been the main Support since November 03 2023 and is headed towards the 1D MA100 (green trend-line) above which the last two main Bearish Legs of the 19-month Channel Up made their first Dead-cat-bounce (March 02 and August 18 2023).

As long as this dead-cat-bounce is contained below the 0.786 Fibonacci retracement level, we see more likely one last corrective wave towards Support 1 and close to the 1D MA200 (orange trend-line). As long as at the time the 1D RSI is on its Support Zone, we will buy for the long-term and target the top of the 19-month Channel Up at 5400.

If the price breaks above the 0.786, we will have a pattern invalidation and buy the break-out instead, targeting again 5400.


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