SPX is strong but faces a short-term correction targeting 7528-7456; breaking 7770 invalidates the bearish view.

We'll take a look at the S&P 500 first, SPX. And again, the same thing we were looking at here, which is the possibility of another two weeks of decline. Now, the secondary support levels have been placed right here .

When I conducted my analysis earlier in the week, and the market appeared to be breaking the daily level, I showed it to be sloping further downwards, but now I must respect what I see.

This is strong, and it has moved higher from this early low point where the Nasdaq has recorded a deeper low than this. The question is, was this the bottom we were looking for, where the price simply stayed within a 3-month range and then broke out upwards ?

When something breaks through its range and then comes back to test the peak of that range, it's because all the vendors were here. Every one of those sellers who have been at that level for 3 months now wants to come back when the price starts to fall again.

They want to cover their open selling positions. The price is going back to where they sold it, and they want to buy it. Therefore, this is why you get support at the top of the range.

That's why we talked about it. This is important for analysis.

So, once again, it seems there are two possible weeks because when I look at the daily chart, I find that the daily cycle has broken. This made me more pessimistic. I had expected that here.

I expected it to drop 7.3% to that lower level there, which is a weekly support level . This is not a major correction period given our current situation, where three downward cycles are intersecting .

This is a strong market and perhaps it cannot do that. Therefore, I removed that forecast and placed it at the secondary weekly support levels.

As you know, I am targeting a correction over the next two or three weeks from 7528 to 7456. So, I have updated my forecast because it found support at the top of the range and then rose again, breaking above the 61.8 level. I must respect that.

Remember , we are not biased in any direction. Again, as I said earlier on the show, while we were talking about this and Arnie and I were discussing our different approaches to analysis, Arnie would look at this—and I'm speaking on his behalf—and say, "Hey, we have a positive OBV (Overflow of Cash) indicator here."

We have nothing negative here. The "Slim" Ribbon is still stable at least and is turning upwards. You see that green arrow. So, there are plenty of reasons to respect the fact that this market doesn't want to go down, and at the same time , I'm still looking at the concordats and saying, "All I look at..."

When I turn to the S&P 500 index, because I want to say, "Okay, what would make me more optimistic ?" it's breaking through this level here, and let's say that level is 7770. So, if it surpasses 7770, it means that this collapse here was false and it gained support, and therefore it is in a much better position.