COMPQ and INDU: Bulls Put on Notice

In Monday's update, I wrote:

If it breaks down before then, then there are still options for that decline to be a C-wave, but we'll have to start watching things more carefully, because, as we know (and as illustrated on the NYA chart), we are likely into a larger fifth wave. And my old personal adage is, "Never bank on fifth waves." For now, we'll continue to presume there are still higher prices out there, but I did want to illustrate that it's not a great place for complacency.

The market is now in the process of attempting a breakdown, so we do need to start watching things more carefully.  INDU is still three waves down, so it's not time for bulls to panic just yet, but the chart discusses some of the options in the event that the current decline goes on to become impulsive:

 COMPQ moved a bit higher, then reversed:

SPX invalidated its proposed triangle, but I'll present a more detailed chart on Monday.

In conclusion, we've known for a while that we were in the ballpark that a fifth wave could complete, so while it would still be nice to see one more wave up, the likelihood of that wave may be more deeply called into question if this decline becomes impulsive.  Trade safe.