NYA, SPX, INDU: Getting Hairy Out There

Okay, so since last update, a few things have happened.  Let's start with NYA, which topped and reversed where I'd anticipated, but then just kept dropping:

The two main options for NYA probably look something like this:

Next, we have INDU, which is back to its key breakout line:

Finally, the near-term SPX decided to also get a little goofier.  I haven't updated the chart, because there are too many options now -- but 6035 can no longer be the bottom of wave C of a triangle.  That low is either wave (a) of said C wave, wave a of a b/2 correction to the prior leg up, or a NESTED WAVE 1 down.  In other words, bulls should be very cautious on a sustained breakdown of the blue "alt: a/1" low.  Note that under the most bullish counts, that low could break somewhat, without too much technical damage immediately, but it would certainly be cause for caution.

In conclusion, the market apparently got wind of my holiday schedule and is trying to make things interesting to keep me from relaxing.  Which brings me to: I'll be traveling with my family starting tomorrow and running through Christmas week.  Due to the way the calendar lays out this year, there are only 4 remaining Monday/Wednesday/Fridays that don't fall on holidays anyway, so I'll be taking those off and returning after the New Year.  I wish everyone a safe holiday, a Merry Christmas, and a prosperous New Year.

In the event there's something Earth-shattering going on toward the end of Christmas week, I may try to publish a special update.  But I'm really hoping that's not necessary just yet!  Trade safe, and have a great holiday!

SPX and COMPQ: Interesting Things

Since last update, SPX declined, but bulls held the level they needed to hold (so far) and SPX remained range-bound.  Eagle-eyed readers probably spotted the triangle I drew (in red) in the last update -- and while SPX went a hair below the speculative line I'd drawn, it's still within a range that makes a triangle possible.  The chart discusses this further (annotation in red):

The triangle could also serve to draw things out through this week; to culminate next week in the potential "Santa Rally" I mentioned a couple weeks back.

COMPQ bears a similar motif, where another high would potentially complete a wave at some degree, and hence be followed by a correction (or worse):

I'm also going to reprint the old "extended fifth" target SPX chart, because it's relevant to the discussion that follows:

In conclusion, both SPX and COMPQ presently still appear slightly more likely to need another high, but be aware that if 6029 fails significantly, it could signal earlier problems for bulls.  

It's interesting that things do seem to have aligned to where both markets could complete a larger wave with one more high, and thus could both fall into a larger correction afterwards.  The only dark spot on this outlook is that SPX might then fall short of its longer-term "extended fifth wave" target in this scenario.  But there are ways for SPX to get around that, such as with the "one more high" it appears to need ending up extending itself and blowing past the targets... or with another new high completing a smaller degree fifth wave and leading to a decent fourth wave correction that ultimately later resolves with another new high of its own.  So, we'll have to play it by ear a bit if the first portions of this thesis play out and adjust as well as we can in real-time.  Trade safe.

SPX Update: Bullish Sentiment, by One Metric, Hits All-Time Highs

Since last update, SPX confirmed the downside inflection zone and its pattern provides some guidance for the near-term going forward:

Before we revisit the big picture chart, I want to discuss a couple of interesting sentiment indicators.  First up, investors are currently insanely bullish.  This is traditionally not a bullish signal, the thinking being that people act on their beliefs.  When people are bullish, it usually means they've already acted on that and bought stocks.  When "everyone" is bullish, then the implication is that "everyone" has already bought -- which would mean the market is running out of fresh buyers to keep driving prices higher.

The percentage of people who think stocks will go higher over the next 12 months just hit an all-time record high, going back to 1987:

Next, insiders are selling at record numbers.  This is a weaker indicator, because we can see by the high bars in red that insiders don't have a great track record of picking tops and often sales volume peaks months or even years before the market does.  But, in context of everything else, it's interesting, nonetheless.

I bring these indicators up because they seem to provide at least some degree of fundamental support to the long-term SPX chart:

Of course, the Fed seems hell-bent on cutting rates again and possibly reigniting inflation, so we'll see how that goes, but for now, all this is worth watching.  Trade safe.

SPX Update: Targets Captured, and Caveats

Last two updates warned that there could be a fourth wave down about to unfold, and the market since made good on that, reaching (and exceeding) both its downside targets.

From a near-term perspective, things get a little tricky here.  I expected this decline to be wave c of an expanded flat, because I suspect the all-time high is a b-wave -- so I expected this to be an impulse down.  Which it is.  But that means if the high is NOT a b-wave, we have, you know, an impulse down.  Which would mean the correction would need another impulse down, if my read of the high is off.

In conclusion, the market behaved as expected, but since I can't be 100% sure of anything, including my own existence, the impulse hanging there on the chart makes it a tougher call.  So:  In the event we see a three-wave rally and a reversal, then we should be guarded.  If the high is indeed a b-wave, then the market would rally to new highs from here (technically, it could support one more small wave down, but that looks less likely -- I mention it to make readers aware that this count remains unscathed if there is another small wave down).  Trade safe.

SPX and COMPQ Updates

The last few updates have noted that SPX probably still needs at least one more 4/5 unwind higher, and last update offered COMPQ as evidence of this:

For now, this remains the presumption.  Last update also noted that SPX could have a fourth wave unwind on deck, and it's at least possible that's what's happening now:

In conclusion, if bears can sustain a breakdown at 6079, then SPX could be unwinding a fourth wave, with first targets as shown on the SPX chart.  Beyond that, not much else to add to prior updates.  Trade safe.

COMPQ and NYA Updates

Since last update, no change to my lean that SPX probably still needs at least one more small 4/5 unwind up, which could unfold now if it so chooses.  COMPQ appears to possibly need two more 4/5 unwinds:

NYA (pronounced "nyah," as in "nyah, I don't want any more coffee right now.") is tracking the first blue line fairly well so far (the first one, being the immediate future on the day I draw it, is always the easiest, so expect some deviation down the line):

Other than that, still not much to add.  Be interesting to see if SPX elects to play out its fourth wave now (some indications that it might, but nothing concrete), or if it instead extends its current wave.  Trade safe.

SPX and NYA: Santa Something

The last two sessions were pretty boring, so still not much to add to the past few weeks of updates.  Something akin to a Santa "rally" (or at least a Santa sideways-up move) is possible, if NYA follows this at all:

SPX is inching closer to the ol' extended fifth target zone:

I mentioned in the last update that I'm leaning toward SPX still needing at least one more 4/5 unwind higher, and that's still out there, as no appropriate 4th has developed since that update.  Trade safe.