Tech is weakest and has already moved below its SPX2604 low. Hence it is logical to assume the S&P will follow suit soon.

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1 Yesterday I concluded If my count is correct than minute-i of minor-c/1 is soon complete and we should see a short and brief minute-ii bounce before iii of c/3 gets going. Little did I know that today would provide for (another) extended 5 th wave and minute i/a should be complete and minute ii/b underway to the shown grey target zone (Fig 1A), between SPX and ideally between Note that all bounces in this current market environment have only met minimum requirements (23.6 to 38.2% retraces), so one shouldn t count on too much upside. It could therefore be that all of b/ii already completed today and a drop below today s lows will confirm that minute-iii/c is underway. Some of you have asked why I label things as a/i, b/2, etc. I do this because one never knows beforehand if it is three waves down or five waves down (or up for that matter). Especially in corrections, waves can do anything, but for now the micro waves continue to be impulse (1 to 5) and thus the numeric labeling is preferred. Tech is weakest and has already moved below its SPX2604 low. Hence it is logical to assume the S&P will follow suit soon. Figure 1. A) SPX 1-min chart. Minor-c underway. B) NAS 1-min chart. Similar as the S&P500. Minor-c confirmed and should be subdividing lower. A B 1 P a g e

2 My preferred paths forward continue to track the price action well, and I ll keep it until the market tells us something else is going on. Indeed a simple a, b, c down to SPX2600 for a double bottom (dotted arrow) cannot be excluded, but since Tech (NDX/NAS) has already moved well-below its October low following along the grey, green and red paths well, I foresee the SPX to do the same. Note that crashes happen from oversold levels, not from overboughth and currently the market is in such environment with still plenty of complacency as the total put call ratio ended today at only 0.97 (noise) and the equities only put/call ratio at 0.82, which is high but still not extreme (>0.95). Figure 2. A) SPX daily chart: The bounce to SPX2647 was all we got for b/2. Dotted arrow shows an a,b,c down to SXP2600 for a double bottom is possible, but not preferred. B) Ideal path to ~$6250 still follows price well. 2 P a g e

3 By letting the charts speak, the weight of the evidence was continously Bearish and told us to continue to look lower, as I concluded yesterday All in all, this is not a fresh and strong looking Bull, but that of a Bear. All until proven otherwise, but for each day that passes nothing has been proven otherwise. Today only added more weight to the evidence of a Bear market as price moved even lower, NOT higher; Hallmark of a Bear. Now the MACD joined the on sell crowd as well. With price below its falling 20d to 200d SMAs, and soon a Bull market set up (price<20d<50d<200d) we must continue to look lower and all rallies must be treated as bounces followed by lower lows until proven otherwise. Figure 3. SPX daily chart. Price below all important SMAs (20d to 200d), no A.I. buy signal, now also a MACD sell signal, and closed below uptrend line: SPX2580 most likely next 3 P a g e

4 Today market breadth closed obviously lower on all indices and negative (see table 1, next page). Thus all McClellan Oscillators FTSOs remain on a sell, whereas the Summation Indices have turned down and are almost all on a sell as well (See table 1 next page). This added added weight to the evidence to expect lower prices ahead. Why? Bulls need positive breadth. When the technical indicators on the price charts are on sell and breadth follows along, then the tide is simple too strong for the Bulls to fight it. The 1-minute TICK saw fiveteen peaks <-800, and only two peak >+800 (highest reading 950, lowest -1230) today. Thus still no buying, and only mostly selling. Figure 4. SPXSI daily chart. Still on a Buy, but close to a sell. Most other SIs close or on Sell now as well. Bottomline: The expected b/2 wave (bounce) topped within the forecasted SPX target zone at SPX2747 on Friday. The break below SPX2790 as mentioned in the weekend update, without making a higher high first, told indeed correctly to expect lower prices as the NAS/NDX are already making lower lows, and the S&P is close. Yesterday I concluded Short term I can count five waves down off last Friday s high into today s low, albeit a marginal lower low can t be excluded. Well, little did I know, but that marginal lower low became a lot lower: extended 5 th wave. Ideally we ll see a wave-ii bounce to SPX2690 +/- 10p before minute-iii of minor-c/3 targets ideally SPX2590 +/- 5p. Note that the NDX/NAS already did a 38.2% retrace off their recent drop from Friday s high intra-day and could already have completed wave-ii. A move below today s low will confirm this thesis. SPX2590 +/- 5p could be enough for a double bottom as that would be where wave-c=a, but my preferrred view remains to continue to look lower in a 5-wave fashion all the way to SPX / NDX until proven otherwise. 4 P a g e

5 Table 1. Buy/Sell Signals based on Summation Indices. Table 2. Buy/Sell for the Exchanged Traded Funds (ETFs) SPY & SH and performance (intermediate- and long-term only) based on mechanical trading system. Short-term and intermediate-term is now available on my private twitter feed. Aloha, Dr. Arnout, aka Soul, ter Schure 2018, Intelligent Investing, LLC. This copyrighted daily periodical is published on most stock market trading days by Intelligent Investing, LLC, and is intended solely for use by designated recipients. No reproduction, retransmission, or other use of the information or images is authorized. Legitimate news media may quote representative passages, in context and with full attribution, for the purpose of reporting on our opinions. Analysis is derived from data believed to be accurate, but such accuracy or completeness cannot be guaranteed. It should not be assumed that such analysis, past or future, will be profitable or will equal past performance or guarantee future performance or trends. All trading and investment decisions are the sole responsibility of the reader. Inclusion of our information for trading and investing are the sole responsibility of the reader and cannot be construed as any type of recommendation, nor solicitation. 5 P a g e