SPX - Although marginal new highs remain possible ⏳, the clock is ticking on a 5%+ drawdown
$S&P 500(.SPX)$ rejected the 6700 target (61.8% of w1 logged) 📉 producing its largest decline since the September low. With the obvious 5-wave structure on $NASDAQ 100(NDX)$ (and $Dow Jones(.DJI)$ ) 🔢, risk for a higher degree correction is rapidly rising ⚠️.
There is still no Weekly bearish SMT divergence yet as SPX, NDX, and DJI all made higher highs last week ⬆️, but we are starting to see Daily bearish SMTs 🔀 — warning that the correction is beginning or around the corner if we make a higher high to 6750 first. The negative RSI divergence 📊 also persists and breadth continues to deteriorate 📉.
If we cross last week’s 6569 low ❌, that would open the door to accelerate toward the September equal lows at 6343 🎯 with downside potential to the Monthly FVG support at 6200 🟦.
Though the strongest confirmation would come if NDX crosses its textbook 2/4 trendline 📏 to activate the model. Additional validation comes from the 50% retracement of Wave 5 (6455) ➗ — if lost, it would underscore that a correction is firmly underway.
Bottom line: Although marginal new highs remain possible ⏳, the clock is ticking on a 5%+ drawdown 📉. Divergences and weakening breadth warn the market is running out of runway 🚨.
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