First off, for last update, I feel obligated to apologize to readers for not remembering to remind everyone yet again about "the red trend line," which I had discussed as critical in numerous prior updates. Monday's rally briefly broke above 2150, but was then rejected at that very same red trend line (see below). On Tuesday, SPX was unable to claim Monday's opening high, and continued to chop lower throughout the session. Unfortunately, this leaves the near-term incredibly ambiguous. The intermediate preferred outlook remains unchanged.
I've attempted to outline some of the near-term potentials on the chart below -- although just about anything goes in a chop zone like this, so the near-term pattern may be even more complex than those shown below, and thus may simply not be apparent yet. These are certainly not the only options.
In conclusion, SPX continues to grind traders into submission. Chop zones sometimes appear to serve the function of capitulating trend traders prior to a larger trending wave finally getting underway -- and to convince trend traders to bail too early once it finally DOES get underway (because everyone has been conditioned to expect more chop). The choppy overlapping nature of the recent waves also means the near-term pattern thus remains up for grabs. Intermediate term, I still favor lower prices. Trade safe.
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