Commentary and chart analysis featuring Elliott Wave Theory, classic TA, and frequent doses of sarcasm.
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Monday, December 5, 2022
SPX, BKX, NYA Updates
Friday, December 2, 2022
SPX Update: Call My Attorneys -- 4100 Target Captured
The last two updates said the exact same thing:
[I]f SPX rolls over here, the first zone to watch is 3865-98 (which would be one area a complex fourth wave could bottom), but it is into a zone where I can no longer promise continued upside. I think it would probably look a bit better with more upside, but it doesn't appear to be "guaranteed" the way it did over the recent past -- thus we'll be watching closely in the event it forms an impulsive decline.
Since those updates, SPX has indeed found more upside, so score one for wave aesthetics and "looking a bit better."
It's also worth noting that way back on October 28, on our forums, one of our regular active members (R2CG) pressed me for a number as to where I thought the rally was headed, and the number I gave was 4100 -- which is exactly the price SPX tagged yesterday:
4100 is also where I've had blue 2 sitting on the chart below for a month:
So here we are, finally. Does that mean the rally needs to end immediately? It could, but of course it doesn't "need" to, and it's entirely possible it continues on either a little (blue 2 is a zone, not a hard number) or a lot (in the event it decides to become red 2). Thus, as I've written in the past couple updates, I'm still awaiting an impulsive decline before getting too aggressive on the bearish side.
What we do have now, though, is a case where the "more upside" of the past couple updates has been achieved, the 4100 target from October has been captured, and the month-long standing blue 2 on the chart above has been reached. Thus, this is a neutral zone; people tend to finally "get it" and become bullish or bearish once targets are captured, but that's the wrong time. Once targets are captured, the market is at last truly free to go either way again. In the current case: It's not bearish until we see an impulsive decline, but neither is it a zone where one would want to initiate new long positions. Trade safe.
Wednesday, November 30, 2022
SPX Update: News Day Meets Inflection Zone
Last update concluded:
[I]f SPX rolls over here, the first zone to watch is 3865-98 (which would be one area a complex fourth wave could bottom), but it is into a zone where I can no longer promise continued upside. I think it would probably look a bit better with more upside, but it doesn't appear to be "guaranteed" the way it did over the recent past -- thus we'll be watching closely in the event it forms an impulsive decline.
And there's been no real change to that. It is interesting that this apparent inflection arrived when it did, since today we have a number of potential market-movers:
- Powell speech
- Pending home sales
- Oil inventories
- JOLTS
- PMI
- FOMC Beige Book
- GDP
- ADP
Monday, November 28, 2022
SPX and TLT Updates
Wednesday, November 23, 2022
SPX and BKX Updates: Torquey Turnkey Turkey
As of this instant, we still do not have an impulsive decline, and it does appear that the last dip was probably just another corrective fourth wave. So for now, we're just going to focus on the big picture:
And since then, the market has continued in a sideways/up grind, so no change yet, and we're going to continue focusing on the big picture, along with an additional chart. First up is SPX, which is unchanged:
Next is BKX, which, in classic technical analysis, would have a bullish appearance if it can sustain a breakout over the black line:
If BKX sustains a breakout, that would (again, traditionally) imply a move toward "or 4?" Which, in turn, would imply SPX may well be headed toward the higher red "or 2." Of course, BKX does need to sustain a breakout first, but if it does, it would call for continued bear caution.
Not much to add beyond that, except to mention that tomorrow is Thanksgiving. My in-laws will be on-island for the holiday, and Friday is a short (and typically light-volume) session anyway, so I'm going to take a (I believe!) well-deserved day off on Friday. Happy Thanksgiving to everyone! And trade safe.
Monday, November 21, 2022
SPX and COMPQ Updates
Friday, November 18, 2022
SPX Update: Keeping It Simple
Last update discussed that the market seemed to have completed several fourth waves recently and noted:
All this implies that the market might be unwinding its upward momentum, meaning the rally might be getting a little tired. I say "might be" because this is the type of market that can easily find a second wind and burn bears who get too aggressive too early, so I'm not inclined to get too far ahead of it... but it's interesting to note that we are approaching the blue 2 zone (chart below).
That said, it's quite possible that if there is a reversal, it will just be a correction on the way to red "or 2," so I'm awaiting an impulsive decline before actually changing footing. As of this exact instant, this is more of a "time to be cautious" moment for bulls, as opposed to a "bet the farm short" moment for bears. It could always turn into one, but we don't have an impulsive decline yet.
As of this instant, we still do not have an impulsive decline, and it does appear that the last dip was probably just another corrective fourth wave. So for now, we're just going to focus on the big picture:
In conclusion, the next real test for bulls will come near the downsloping red trend line and blue 2. Until then, bears would need to sustain a breakdown of the rising black channel to get anything started. Trade safe.