SPX and SPX Update: SPX Update

Today's title was brought to you by the Department of Redundancy Department (motto: "If we're being redundant, then please allow us to repeat ourselves!").

In Monday's update, I mentioned that the downward wave appeared incomplete, and thus a new low was probably still needed (along with a whole bunch of caveats in case I was wrong, as is my wont).  Shortly after Monday's close, I mentioned in our private forums that the rally appeared roughly complete -- and, from there, we gapped down directly at the open on Tuesday.  It appears we will gap down again today, and, presuming we break 2052 SPX today, that would leave mainly bearish options for the near-term.

The chart below outlines the two most apparent near-term options.  Both are bearish, but one is directly bearish, while the other would provide bears with another sell-op:

 The updated SPX 2-hour chart is below:

In conclusion, barring a miraculous stick-save by the bulls, Target 2 from a week ago looks like it's almost a given at this point, and lower targets are now appearing on the radar.  It's worth a reminder that, in the bigger picture, a break of the 1800 zone is still preferred.  The question is whether 2111 marks the completion of ALL OF Bull: C, or if there's to be one more minor new high.  As noted, the near-term pattern is beginning to look increasingly bearish; if that continues, the odds that ALL OF C is complete will rise accordingly.  Trade safe.   

SPX and RUT: Target 1 Captured

Generally speaking, the best time to sell or buy the market is usually when it seems like the craziest thing in the world.  Everyone is always bullish AFTER a big rally, and bearish AFTER a big decline, but those are the very times to be skeptical of its continuation.  On Monday, I was cautiously near-term bearish; by Wednesday, I was strongly near-term bearish.  We got a solid decline after that, so that's going to make people want to be bearish now.  That could be correct, but this is where I get cautious again, for reasons we'll examine below.

Let's start with RUT.  RUT came down sharply and back-tested the red trend line on Friday.  So far, it has found buyers at that line.  INDU and BKX (not shown) tested similar lines, and also bounced.  And that means bears should consider being cautious again.

 SPX captured and exceeded its first target:

In conclusion, there's a difference between what "looks more likely" from an analytical standpoint and what makes sense from a trading standpoint.  From a trading standpoint, the play was selling the 2/b bounce when we had an impulsive decline, a clear stop, and I was strongly in favor of a new low (and the risk/reward was reasonable) -- and then taking/protecting at least partial profits in the first target zone.  From an actionable standpoint, things are a little more iffy in the price zone as of Friday's close.  Analytically, the near-term pattern does look like it may be incomplete, and thus that a new low might be needed, but we do have numerous markets bouncing off trend line back-tests, so bulls may try to defend the zone on either side of Friday's lows.  Trade safe.

SPX Update: BoJ and Apple = No Surprise

Monday's brief update noted that 2112 SPX could be treated as a level to act against, while Wednesday's update more firmly anticipated lower prices (complete with downside target zones), and suggested that it might be Time for Bears to Wake Up.  After Monday, Apple "surprised" the market in a negative way; then, after Wednesday, the BoJ announcement likewise "surprised" the market in a negative way.  Long time readers know I firmly believe that the charts lead the news, not vice versa, and this week stands as further testament of that.

Sometimes tops are a challenge, but this one was pretty obvious in the charts, especially by Wednesday.  There's been no material change, and I still expect SPX will reach Target 1 from Wednesday's update, with a decent shot at reaching Target 2:

We're currently in a small third wave decline, but -- bigger picture -- the potential that this is "another fourth" wave can't be fully eliminated until this 3-wave decline becomes impulsive.  Thus, if the market makes it into the 2030-40 T2 zone and the smallest waves begin to look like complete waveforms, bears might want to watch carefully to see how price reacts to that zone.

In conclusion, lower prices continue to appear likely over the near-term.  Bigger picture, the possibility for another 4th and 5th wave can't be ruled out yet, but this remains "bearish until proven otherwise" territory (as noted on Monday) for the moment.  Trade safe.

SPX, RUT, BKX: Time for Bears to Wake Up?

Today is another Fed day, which seem to come at the rate of upwards of 8 per month these days.  I'm going to keep the words short, but I do have three charts for today's update.  This is an inflection point, and as long as bears can keep SPX from sustaining a breakout, they do have an opportunity to turn the market here. 

Frankly, even a breakout at 2112 won't do much harm to the big picture (bulls need the all-time high to technically damage the bear picture), but would reset the red count on the chart below.

RUT is at a big picture inflection point as well:

BKX captured its upside targets, and is also in an inflection zone:

In conclusion, if one is bearishly inclined, this is a larger inflection zone that stands a decent chance of turning the market.  All markets do have a little bit of wiggle room here, and if they were to run slightly higher, it wouldn't change the inflection zone unless and until the all-time high is reclaimed -- but we do seem to have an impulsive decline from 2111 in SPX, so we could be witnessing the early stages of a turn.   Trade safe.

SPX Update: No Material Change. For the Market, Anyway.

Today's update is going to be short.  My father passed away on Friday evening, so I haven't been doing much charting this weekend. 

Essentially, there's been no material change from the last update.

All I'll add down here is this:  If you haven't spoken to a loved on in a while and you suddenly feel the urge to call them, then do it.  Call them as soon as you can... don't wait another day.  I was fortunate enough to speak to my father on Thursday night -- but if I'd put that phone call off for even 24 hours, that 24 hours would have lasted for the rest of my life.  Trade safe.

SPX Update: All the Marbles

Last update's preferred count showed SPX as still needing a fifth wave into the 2110-25 target zone, and Wednesday's market provided that.

This is a familiar position for bears:  We have a potentially complete wave structure, but as yet no larger impulsive decline to confirm a turn.  This means that there could still be another fourth and fifth wave to unravel -- and, in fact, that might fit the pattern slightly better.  But it isn't required, and we're into a price zone that has provided significant resistance on two prior occasions.

Way back near 1810, we knew that a rally of this magnitude was a distinct possibility, and I immediately began showing "Bull C" labels on the charts, up near 2116ish.  So, in my mind, all the rally's progress to this point means very little from a technical standpoint.  This price zone near the all-time-highs will provide the true test as to whether the bull market that began in 2009 is still underway or not.

The issue I have with this being the beginning of a major fifth wave isn't shown on this chart -- in fact, I haven't shown it at all in these updates, nor will I.  Suffice to say that if this were to be a major fifth wave, there are certain markers I'll be watching for before I shift footing.  As of yet, I'm still more inclined to think this is a second or (B) wave rally, and ultimately due to be retraced fully.

Near term, we could have completed ALL OF Bear (B)/2, but SPX could still support another fourth and fifth wave unravel.

In conclusion, the charts pretty much sum up my thoughts as well as I can -- basically, we're finally into the price zone that represents THE test for this market.  Trade safe.

SPX, NYA, COMPQ Updates

What is there to say about this market at this point?  Nothing really, except things like "Stocks have reached a permanently high plateau," and so forth.  So far, the market has powered through every resistance zone, and continued capturing its upside "if/then" breakout targets.

NYA captured its breakout target:

COMPQ is also testing its upside target from a month ago:

Thus, COMPQ and NYA are now testing resistance.  SPX and INDU are close to their all-time highs, so there too, we have a test of resistance underway.  From a technical standpoint, the all-time highs are much more important resistance zones than any the rally has encountered thus far, so we're into "make or break" territory for bears. 

Looking at the near-term, last update mentioned that there was a reasonable chance that any downside during Monday's session would merely mark a micro-degree fourth wave, and that's what it ended up being.  SPX may still have some fourth and fifth waves left to unravel:

In conclusion, thus far, the rally has overcome all resistance zones, but we are now effectively testing the all-time highs, so the most important test is now underway.  Trade safe.