SPX Update: Rejected at Blue 2 Inflection

For the past few updates, I shifted from my previous near-term bullish stance to a more cautious stance, and on December 5, I wrote: 

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.

As we know now, the last week's-worth of warnings turned out to be timely, as SPX has since been rejected literally on the button at the blue 2 inflection (which was 4100+/-: see annotation from November 16):

In conclusion, SPX has been rejected dead-on from the blue 2 inflection, but we do not yet have an impulsive decline (5 waves down).  To that, I would add that the market appears reasonably likely to form one, given the structure so far, but of course that's just how a typical wave would form -- so I'm stating that it looks "reasonably likely" based on the typical wave, as opposed to it actually being there on the chart in black and white yet.  We'll see how it develops from here, but do note that if we're already in blue 3 already, things can get ugly over the coming weeks.  Trade safe.

SPX, BKX, NYA Updates

The market has done nothing since last update, remaining range bound, so there's not much to add in that regard -- however, I did want to pull two charts forward and update them, starting with NYA:

Note that blue (C) can end short or long of the "textbook" target, so if we see any impulsive declines, we'll go on alert immediately.

Next is BKX, which has remained stalled since its last update:

Finally, SPX is still in the blue 2 inflection zone:

This is a tricky market right now, because I don't see a cohesive theme across these markets, since if BKX were to sustain a breakout, then that would look fairly bullish, which might line up with Red 2 in SPX, but would then put NYA in kind of a weird position (since it would probably need to overshoot its textbook target notably in order to keep up with SPX and BKX).  The only semi-cohesive theme might be if we're at, or close to, the top and the rally ends fairly directly (then all three of these markets might already be on the same page).  Doesn't mean that's what will happen, and again, I'm awaiting an impulsive decline... but it's one of the factors making the near-term challenging to read.

Beyond that, nothing to add to Friday's update.  Trade safe.

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.

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

I think my idealized scenario would involve some whipsaws before it really gets rolling, but we are into the blue 2 inflection zone -- and it's not supposed to be easy here:

In conclusion, I think it's wise for bulls to remain on alert right now, because, as I noted last update, there is the possibility for ALL OF blue 2 to finally be complete, or nearly so.  Trade safe.

SPX and TLT Updates

On November 18, I wrote that "the last dip was probably just another corrective fourth wave," and that read has finally been confirmed by SPX reclaiming its most recent high.  Things are getting a little more complicated now, as some of the more "obvious" needed fourth waves have now potentially resolved, and fourth waves are notoriously complex to begin with.  For example, one option is for SPX to form a complex fourth right now, by heading back below 3906.  

It would probably still look better with higher prices, but we're now into territory where we have to at least consider the option that it's "done enough" fourth waves and reverses more significantly.  In other words, I'm not calling the top yet, but it's at least on the table finally and I can't rule it out anymore.  However, I'd still like to see an impulsive decline before considering that option in more detail, so the big picture chart remains unchanged for now.

TLT has rallied ever since my warning (which turned out to be the exact bottom), but is now testing an area that could potentially offer resistance, and is thus worth watching more closely again:

In conclusion, if 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.  Trade safe.

SPX and BKX Updates: Torquey Turnkey Turkey

On November 18, I wrote:

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.

SPX and COMPQ Updates

The market did basically nothing on Friday, so the very short-term is now even more of an overlapping mess, thus giving no new clues and leaving us in basically the same place we were on Friday.  In other words, we'll continue focusing on the big picture until the short-term clarifies a bit.

I did want to note that COMPQ is back to intermediate resistance, so while there's still nothing that suggests we've changed the near-term trend (yet), this is still an area of interest.

In conclusion, nothing much to add to the past couple updates.  Trade safe.