SPX and TLT Updates: Bonds Showing Signs of Trouble

Yesterday's update expected more upside, and the S&P 500 (SPX) indeed extended its rally.  I continue to favor the view that the decline completed at 1430, and that the market is headed to 1490-1500 next.  Today has the potential to make or break that view -- this is probably the bears last chance for at least a little while, and they can ill-afford further upside here.

This is the type of market I like, since there are now a number of fairly clear and actionable levels.  The two-minute chart below details those levels; I continue to feel this will end in the bulls' favor, but breaks of the key levels outlined could shift my short-term expectations.  Note yesterday's trip to the top of the black base channel.  If my preferred bullish view is off and bears are instead going to turn things around, this is the zone where they'll do so.

Stepping back just slightly to provide more perspective. 1463 and 1467 are the levels where bears run out of real estate for this wave.

Moving out to the daily chart and the next preferred target zone:

The NYSE Composite (NYA, chart below) is also not showing any real signs of weakness yet...

The SPX trendline chart is shown below.  Bulls broke out above the falling red trendline yesterday.  Note that the ChiOsc (bottom panel) oversold readings I called attention to back on September 27 proved helpful as a buy signal.

A very long-term view of SPX shows potential channel resistance near 1500:

Below is an update on the iShares Barclays 20-year Treasury Bond Fund (TLT), which has now turned lower from the potential pivot zone discussed on October 1.  Continued downside from here is likely to foreshadow long-term declines in bonds.  The key levels haven't quite been crossed, so bond bulls aren't completely out of the running just yet -- but they do need to reverse things fairly directly, and the momentum of the decline doesn't look promising for them at the moment.

Finally, I wanted to publish a different take on Light Crude Crass Smarty-Pants Oil (WTIC), just because I enjoy being a contrarian.  I'm oil-neutral at the moment, since I'm not sold on this count yet and I'm not sold on the mega-bear count yet either -- but this is certainly a potential that oil bears might want to stay alert to:

Next, I simply need to check if I've uploaded all the charts, so hang on a second... yep, I have.  In conclusion, as long as the equities market remains above the key levels noted, the bulls remain in control there.  Bonds, on the other hand, are showing warning signs.  Trade safe.