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PPI comes in hotter than expected, too!But 10-year YIELD, after knee-jerking to 5.10% from 5.08%, is now LOWER, at 5.06%... ignoring the relatively hot PPI data, and instead, apparently still fixating on the impact of the dressdown of the AI boom.The Equity Indices initially spiked lower-- to marginal new lows for this correction- but have recovered to where they were trading just before the PPI Report. That said, my near-term pattern work argues that unless and until ES climbs and sustains above 7795, strength off this AM's marginal new corrective low at 7728.
Due to the size of this rally and the fact that it seems we only had 3 waves into the last low, I am going to modify the blue count to be a 4th wave with an expanded b-wave low. That means this can still push a bit higher and still be wave (iv). But, take note that if all we see is a corrective pullback from up here, and then break out through the 89.72 level, this opens the door in a big way to the correction having completed. So, as long as we remain below 89.
With today's sharp drop, the risk of the market having already put in a top in the larger diagonal off of the June 9th low has certainly increased. We are currently testing the lower end of the key support zone for the potential wave b, as I am showing in white on the SPX chart. However, if we continue to push lower over the weekend and early next week, then we will have confirmation that we have indeed topped in all of the diagonal off of the June lows.
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