That was the title of a chapter in my 1st technical primer. It still holds true today: Half-Masted Flag denoting 50% move lower yet to come. In this case SPX 2970 is target; also approximated 200 dy MA (not shown). But question: What if the patterns on both side of the flag are Elliott Impulse waves? Are we looking at Waves 1 & 3 of a decline that will take off another ~ 100 SPX points to 2712? Possibly triggering a Death Cross on the MA's? We should know by Wednesday afternoon if 2790 level is going to hold - or if this is the start of another long bumpy ride.
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Surviving Everest I - Two days ago we hoisted a half-masted flag on the SPX and surmised we would know by Wednesday afternoon if 2790 would hold - it didn't. 200 Day MA will neither; as of this writing futures stand @2770. Breaking a Gann Fan line along with horizontal support the S&P stands poised for secondary target @2712. Extrapolating trendlines leads us to project conjunction of .38 Fibonacci and lower Gann fan intersecting @ 2575. While dailies are quite oversold, weekly technicals have room to run, lower.
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YOU KNOW THE DRILL - Retracing .38% of the monthly price decline - in a day - from extremely oversold levels; today's rally has all the hallmarks of a Bear Bounce. It could also signify a Wave IV reversal (with the Flag marking Wave II) of the five wave Impulse decline to the 2650 - 2575 area we are forecasting. Like many Bear rallies this one is built on hope: Hope that Fed Chair Powell will be pro-active and ease rates by Fall to alleviate developing illiquidity in bond market. Hope that Presidents Trump & Xi will make nice at the end of the month's G-20. Hope that consumer confidence will hold despite a plethora of negative economic news worldwide. Failing any one of these. It may take the month of June before the markets resume their swoon.