NYA and SPX: Confirmed

On February 10, I wrote: 

[B]ears are still very much in the near-term game here, and normally one would expect some downside follow-through to the pattern so far (though worth being aware that it's three waves down from 4176 so far, which, 9 out of 10 times, means it either needs to become five down, or it will turn into an expanded flat that runs back toward 4176 before heading lower later; 1 out of 10 times it's something weird like a double three).

On February 15, I discussed INDU's noisy pattern and that it had given me a little doubt, but wrote that "my initial instinct last update was that SPX had only formed three waves down and was thus likely to rally and return to the low, and I'll stick with my first read for now."

On February 17, I wrote:  "[N]o change, except to add that there's now a possible micro bear nest in the near term pattern."

Given how wacky this market is, and how confused the majority of participants are, I have to say that I'm rather pleased that all of these reads were on-target, given the current environment.

SPX has now reached the first downside trend line, which I discussed a couple weeks ago:

On the chart above, I mention that it "looks reasonably likely" that SPX will ultimately reach the red trend line; the chart below discusses why I said that:

Finally, NYA reaching its target zone was one of the things that helped all the prior analysis work, to get us looking the right direction at the reversal:

In conclusion, SPX appears to need further downside before it can even consider forming a decent low -- and while it's a bit early to say for certain "how low," I suspect the red trend line at the minimum, and am on the verge of leaning toward the 3750-67 zone.  Also, do keep in mind the larger wave position here:  Again, it's too early to say without a larger impulse down, but it's worth knowing that it's at least within the realm of possibility that SPX has topped blue wave (2) and is headed much lower from here.  Trade safe.

SPX Update

The market has traded sideways since last update, so no change, except to add that there's now a possible micro bear nest in the near term pattern:

SPX is still in the same place in the bigger picture:

In conclusion, not much to add since last update, but I suspect we'll get some resolution soon.  Trade safe.

SPX and INDU Updates

Last update noted the possibility of a complex flat toward 4176, which may be unfolding now:

No change to the big picture, and while SPX is within an inflection zone, Red 2 remains on the table:

Near-term, the pattern has gotten noisy in INDU:

In conclusion, my initial instinct last update was that SPX had only formed three waves down and was thus likely to rally and return to the low, and I'll stick with my first read for now, but INDU has at least caused me a bit of uncertainty in that, so we'll see how it plays from here.  Trade safe.

SPX and NYA Updates

The main thing to add since last update is for the very near-term:

No change to the big picture:

NYA is in a similar position to SPX, and appears to be incomplete to the downside:

In conclusion, the picture remains the same as it did on Friday, with the market within an intermediate inflection zone and the near-term appearing to be incomplete to the downside so far.  Trade safe.

SPX and NYA Updates

On Monday, I noted that bulls needed to recover the breakout or they were at risk, and SPX now appears to have head-fake whipsawed (some people only refer to downside whipsaws as "whipsaws" and upside breakout/reversals as "head-fakes," but I generally refer to fake breakouts in either direction as "whipsaws," since the informal use of the term simple means "subject to a double loss," which is why I sometimes use both terms for upside "whipsaws") its most recent breakout.

NYA has remained stalled since effectively reaching its target zone (coming within less than 1% of the target may have been close enough):

And, of course, as noted before, Blue 2 remains on the table:

In conclusion, bears are still very much in the near-term game here, and normally one would expect some downside follow-through to the pattern so far (though worth being aware that it's three waves down from 4176 so far, which, 9 out of 10 times, means it either needs to become five down, or it will turn into an expanded flat that runs back toward 4176 before heading lower later; 1 out of 10 times it's something weird like a double three).  Trade safe.

SPX, NYA, and Powell

Powell spoke yesterday, and I found some of his statements interesting, one of which was: “There has been an expectation that [inflation] will go away quickly and painlessly; I don’t think it’s guaranteed that’s the base case.  It will take some time.”

Implicit in this statement is that, so far, things have been "painless."  (I agree with that assessment and have said so a number of times.)  Explicit in his statement is that Powell does not "think it's guaranteed" that things will remain painless.

Seemingly in an effort to drive home that point, he added (emphasis mine): “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more.”

Powell seems to be asking: "What exactly do I need to do to create more layoffs?"  So the implications of that are interesting to ponder.

SPX has traded sideways since last update, so there's nothing to add in that regard.  Yesterday closed at the blue trendline, with no clear whipsaw or breakout yet:

NYA has also traded sideways:

Beyond that, not much to add to the prior update.  Trade safe.

SPX and NYA: Keeping It Lively

So they're keeping things interesting for now.  Last update noted that NYA had come exceedingly close to its two-month-old target:

And now SPX is threatening to whipsaw its most recent breakout:

This action keeps blue 2 on the table for the time being:

In conclusion, bulls need SPX to recover its breakout, which would clear the way for further upside.  If they cannot do so and this breakout whipsaws, then the confluence of the red and black trendlines on the final chart above may be worth keeping an eye on as a potential downside target area.  Trade safe.