After a long battle the bears are gaining control again at the start of earnings season one month before the US election.
The odds for the bulls to hold the red trend line the next weeks are slim and falling, therefore I drew four scenarios how the "S&P 500" might move in the last quarter of the year 2016 and further in the year 2017 after the US election. I suspect one last bounce higher to occur in the next two weeks, which would be a better time to post this bearish chart, but on the big picture as mentioned before I don't see this changing the outlook anymore. This is the reason though why I post this chart as "neutral" and not as "short", because the crash scenarios are not fully confirmed yet with a final bull trap.
Scenario A: Awesome. A fast but brief drop into support around 2085-2100-2115. Followed by a very strong rally starting in the first quarter of 2017 with rally target 2300 points for the year 2017 (maybe the rally starts even earlier after the US election, after a December FED rate hike).
Scenario B: A slow choppy but controlled pullback into support around 2015-2030-2045. This scenario also offers the chance of a very strong rally back towards at least 2200 points again in the year 2017.
Scenario C: A fast chaotic crash below 2100 might find support around 1950-1975-2000 points. Most likely after this large decline the stock market might only move back up to 2150 in the year 2017 to test the resistance there.
Scenario D: Doom. A massive flash crash due to the lack of liquidity in the market and the burst of the real estate REIT bubble, tech unicorn FANG bubble and the overall ETF market bubble (among many other bubbles which might burst simultaneously as mentioned in the related link "Bubbles everywhere" below).
My original idea from 2 months ago: Bubbles everywhere: Current risks to the US stock market rally
I was pondering to publish this as a new chart, but decided that I need to see more evidence of a bullish trend change next days.
The S&P 500 close of Friday, October 14 shows a lot of bullish divergence on the mainstream indicators (RSI, Stochastic, CCI) and the S&P 500 bounced back from outside the standard deviation as shown by the Bollinger Band. Therefore there is still some chance left for the bulls to turn this sinking ship around, but the bulls have to act very fast and also very strong in the two remaining weeks of October: