US equity technicals - The clock is ticking

There is no change to our preferred and alternative outlook for the US market. From the 5-wave decline in last week's hourly charts, we deduce that the current rebound is probably the corrective wave-2 of the final major wave-5. The DJIA could rebound to about 8,498-8,637, its 50-61.8% FR levels while the S&P500's rebound will end close to 889, its 61.8% FR level. Both wave counts are still valid. Either way, we are looking for a major down leg after this minor rebound. Our preferred wave-5 target of 6,600 for the DJIA is still possible if the 7,400 level gives way. Otherwise, a bullish double bottom could form, followed by a strong relief rally.

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