It seems that today's news were the perfect catalyst to drop the markets below overbought conditions. It can be clearly visualized on how the RSI was rejected at the top, despite still bullish flows and buying pressure throughout the early session. If SPX drops below today's low it might test strong support at 4115. If that fails, I expect a strong bounce at 4082 if we reach that point, where EMA and MA support is found. Another possibility is to gap up Friday and then continue to trade lower for the rest of the day. Ideally we want a gap down early morning, touch key levels and bounce strongly to start printing a weekly bull-flag. Whatever happens, if the maginot line is broken, I expect a strong correction to put in a major wave 4.
