If this was a bear market rally, chaos is close.

The case, and plan, for bearish continuation from 5460 area.

We’re at a major inflection point. One that, for the first time in a while, tempts me back towards a swing bear bias.

This is a pending bearish butterfly.

And that tells us a lot. Whatever the decision out of this area is, it’s likely to dictate the trend for the foreseeable future.

How to deal with this situation is described in full in these two strategies;

• Butterfly Correction Pattern in a Trend (Free post)

• Butterfly Continuation Failure Pattern in a Trend (Free post)

In this post, we’re going to cover the bearish variant. Our plans for a bull move are well established. If those are wrong, they’re likely to fail soon and this is the optimal time for high RR bear bets and certainly a time to have a bearish backup plan, if nothing else.

Here’s the case for SPX to 4660, and what that would imply if it happens.