S+P 500, breakdown or break out.

The S+P 500 is again at a critical decision point.  According to my model, it either goes up just $2 more from it's current price of 1801.39 (and causes a reset in thinking) or it turns around and has a significant breakdown.  There are other possibilities but these are the main two.

Right now I model the leftmost peak as a 5th of a 5th wave.  That means a significant pull back is warranted at the very least.  The low following that peak (which is starting to look like an owl's beak) can be counted as 5 waves down.  If all this is correct then that owl's beak was wave 1 down and wave 2 is almost complete.  Per EW rules, it cannot go above the top of the prior 5th, not by even one penny, and still be considered a 2nd wave.  If it does that it becomes something else.

And so we now have the herd paused at the decision point looking for something that will make it decide to go a bit further north or to not cross this river and instead turn south.  This ending pattern has already extended itself in every conceivable way over the past several days.  It has been amazing to watch.  But the herd knows that the markets are nothing but greater fool's theory in action and everyone is afraid to be the last fool left holding the empty bag.

You rarely get a chance to make a bet like the one here today.  I suspect many, many hedge funds are loading up their bearish asymmetrical bets while trying to keep them off the RADAR.  If the chart breaks above the trigger level by even a penny, these guys can then quietly sneak back out with no hard no foul.  But if the herd turns downward then they will come out of the woodwork saying scary things to try to get the herd moving south.

And to think most people still believe that the stock market is anything more than gambling in a fixed game of pseudo chance...

In any case, my model still says the odds greatly favor a big pullback from here.  I'm talking at least 100 S+P points and perhaps eventually much, much more.