SPX and INDU: Inflection Zone Acts as Resistance on First Test

Last update noted that we were getting into an inflection zone, and on Tuesday, the market put an exclamation point on that.

Let's look at the charts to see if bears can continue celebrating, or if they need to tread cautiously for the near-term, starting with INDU:

Next up is SPX:

So, as we can see on the near-term charts, things aren't locked down for bears just yet.  SPX is only three waves down (at present) and INDU has only retested its prior breakout, which has held (again: so far).  Since we can only trade what we see, what we see is a market that's been rejected at a potentially major inflection zone, but has yet to indicate whether it's going to make another run back up into that zone.

Bigger picture, we see the nature of the current inflection zone clearly -- but we need to keep in mind that big inflection zones have big ranges, too, so there's plenty of room for INDU to run up to new highs again and still be within the inflection zone.

In conclusion, bears had a fun day yesterday, but they haven't yet proven they're ready to take over (since they've only formed three waves down so far) and thus we can't yet rule out another run up.  We'll see how things develop for the remainder of the week.  Trade safe.