Some $SPX Long-Term Counts

No matter how you slice it, a 5-wave pattern is completing and it will correct.

The scope, speed and damage done in the course of the correction should guide us to:

1) Most bearish
2) Bearish but then bullish
3) A bit bearish but then bullish

Many of the the momentum stocks have already endured outright bear market-severity declines, yet the indices remain supported.

That means a successful rotation has been occurring, and that is bullish. /2

Many of the industrials have exited decades-long corrective patterns and have produced 1st impulse waves.

If the momentum stocks continue to correct, and the industrials enter their 1st *corrective* waves, the indices will be forced to correct as a whole. /3

Afterwards, it is possible that everything rallies together. /4

The flip side is that we are of course witnessing very high asset prices as measured by a variety of metrics and we appear to be levered to the gills.

A serious catalyst could cause an unwinding that will not stop once it starts; that is why we can't rule that out altogether. /5

The hope here is that by watching the nature of the correction that should be arriving quite soon, we will be able to determine which path we're taking. /6

An example of a momentum stock getting smoked is $PLTR. I showed this the other day, and the count I provided appears to be working.

When we think of the euphoria in the market, it needs to be remedied and it certainly is here.

Once that froth exits, the markets can resume. /7

But is retail "euphoric" on $GM?

I doubt it.

Sure, it's had a tremendous rally, but, its nature could make one deduce that more will then follow. /8

So, I think it is plausible, despite the heavy retail involvement (which should coincide with major tops), that the markets continue in an extended bull market, perhaps for at least several years, with rotation serving as the instrument to punish excess along the way. /9

As the momentum stocks have been crushed, the inexperienced speculators have moved to crypto. I suspect that class of products are next to the slaughter, but that may have little effect on the indexes, just as the momentum plays have been crushed while the indexes survived. /10

And yet, we must remain constantly vigilant for corrections, and even very serious ones, which may unfold due to the extension we see in the variety of ways we measure asset prices and the levels of debt in the system. /11

However many billions of retail dollars were levered into momentum plays via margin, we know that whatever effect the crushing of these stocks have had on those speculators, the indexes have been unaffected and until we see otherwise, they may simply be able to do so again. /12