The purpose of this update is to define exactly where we are on the market clock, because if we know where we are, broadly speaking we will know where we are going.
Last week the market plunged to arrive at the last ditch support level in the 1800 – 1850 zone on the S&P500 index that we had earlier defined as marking the lower boundary of the giant Head-and-Shoulders top. Once this level is breached, the full-on crash starts. Because it arrived at this support level in an even more oversold state than it was at the depths of the plunge last August, and because Smart Money has become bullish, it made it unlikely that it would break down and crash just yet, and sure enough the market has started to bounce, which means that the danger has probably abated, for now.
