SPX, NYA, Oil, and the Fed: Catalyst Pending?

In Monday's update (which was published Sunday night), I wrote:  

I'm inclined to lean toward Friday's low being a b-wave, so suspect that low will be revisited/broken early this week.

I feel I need to mention that at the time I published that, futures were still trading in the ballpark of Friday's high.  After I published, futures headed sharply lower -- then, by the cash open, the market gapped down and revisited Friday's low.  So that was a hit and (when I actually made and published the call) was harder than it looked -- it just didn't end up being of much practical use for cash traders, unfortunately.  

After revisiting Friday's low, the market immediately began rallying, which continued until late in the session yesterday.  Which means SPX is back to roughly the same price it was on Friday.  Which means there's not a lot new to say yet.

Unlike SPX, NYA did manage to break a bit past its blue target.  It remains within the current inflection zone until roughly 15,700+/-.

Oil has continued rallying since last month's update:

In related news, the Fed's balance sheet spiked by about $400 billion from March 8 to March 22:

A little of that spike did roll off since March 22, but we'll all be waiting with bated breath to find out whether we're still "fighting inflation" -- or have decided to go back to fueling it.  Interesting that they spent a year gradually and painstakingly rolling off the balance sheet, only to add half of it back in only two weeks.

I'm reminded of something I wrote in July of 2021:

The Federal Reserve has at last painted itself into its final corner -- or, to use another, perhaps more apt, metaphor: The Fed has placed itself on a treadmill from which there is no escape. There appears to be nothing it can do from here (other than a very modest taper) that won't immediately tank the markets. Even talk of such things spooks investors, which is why Powell has been so dovish of late. The Fed must keep rates low. It must continue QE (in one form or another) and continue buying Treasuries and Mortgage-Backed-Securities. The Fed cannot do anything but keep running at or near its current pace in perpetuity. 

The Fed's new reality is like a treadmill-based parody of the movie Speed: If the Fed slows down too much, the market will implode, killing innocent economies in the process.

We just got a taste of exactly that with the SVB (et al) collapse.  The Fed had to Speed up again, or risk more serious issues in the banking sector snowballing into a juggernaut.  And that "catastrophe averted" was after the aforementioned modest taper.

And then that reminded me of something else from the same piece: 

The Fed likes to talk about its "tools," but all its tools are currently running at full capacity just to keep the market from collapsing under its own weight. There are no more tools to call upon. 

All it will take is a catalyst. 

Later, people will blame the catalyst as if it were the "cause" (you and I know they will do this because they do it every time) -- but we'll know it was not the cause. Our short-sighted choices were the cause. Our inability to recognize, appreciate, and properly manage our good-fortune was the cause. 

In short, we ourselves were the cause. We have met the enemy, and he is us. The catalyst will only be the trigger that forces the reckoning.

Last month, the market was all ready to begin collapsing under its own weight, but then the Fed ramped its "tools" right back up to "full capacity" and saved the day.  

And all this made me again wonder about the second portion of the outlined equation, and to wonder if that's what the market is waiting on:  A catalyst.  China invades Taiwan, Russia uses nukes, commercial real estate collapses, that sort of thing.  In other words, something that exposes just how weak and unprepared we really are right now.

Just food for thought.  We'll see what the market does to close out the week.  Trade safe.

SPX and NYA: A Million Miles (a Million Miles)

Since last update, the market has continued its near-term churning within its even larger "lost year" of churning.  I'm inclined to lean toward Friday's low being a b-wave, so suspect that low will be revisited/broken early this week.  If that's correct, it would keep the most bearish options on the table:

Of course, after a ~year in a trading range, it gets hard to imagine the market doing anything other than running sideways for another 600 years, but that's how they getcha!

NYA does have a potentially-complete c (or 3) rally on the board:

In conclusion, everyone has had about enough of this endless grind, so we'll see if the market is ready to start doing something finally.  It's at least worth mentioning that in the most bearish world, this setup would be exceedingly bearish; we'll see if the market negates this setup or not.  Until then, there's just not much else to add.  Trade safe.

SPX: "Clowns to the Left of Me, Jokers to the Right... Here I Am, Stuck in the Middle with Glue"

I think we only need one chart today.  Weeks ago, I said that "unless/until blue 2 is broken, we're going to presume we're in blue ii," and we're now at the "do or die" stage of that presumption, since blue 2 is not far overhead.  So while Red 2 remains possible, it doesn't gain significant traction until blue 2 is broken.

In conclusion, SPX remains in the light blue circle inflection zone, so it remains to be seen if this will generate a reaction.  If this is blue ii, then a reversal should be on the horizon.  If it isn't, then it isn't, and we may know that soon enough, too.  This market has been tough because we've been stuck in a trading range for almost a year now, and patterns get increasingly difficult the longer a range continues.  Trade safe.

NYA and SPX: Back in the USSR

Let's jump right into the charts, starting with NYA, which has now captured its second upside target box:

SPX is, interestingly, back into the inflection zone I mentioned a couple weeks ago:

In conclusion, I want to see if and how the market reacts to these inflection zones before commenting too much further, so we'll take a deeper dive on Wednesday.  Trade safe.

SPX and NYA Updates

Since last update, SPX has made the previously-favored b-wave low count seem less likely:

NYA has captured its first upside target zone:

If NYA reaches 15400-15800, then that is a very significant inflection zone, so I would be interested to see how the market reacts to it.

In conclusion, the near-term bear count in SPX hasn't quite been invalidated, but it's on the ropes.  NYA is now in the process of forming three waves up, and recall that three waves can be an ABC correction.  The current wave can run higher, but be aware that this can become a very significant inflection and reverse.  I'd like to see a bit more from the market before calling for a reversal, but just putting that option out there for now.  Trade safe.

SPX, NYA, OIL Updates

Last update focused on the near-term potentials, and the market traded sideways/down since then, leaving everything unresolved.  I've added the new relevant commentary to the near-term SPX chart:

No change in NYA:

Finally, I thought about adding this oil chart to Monday's update, then didn't, and I'm still uncertain about adding it now... but will anyway.  Oil does NOT yet have an impulsive rally off the low, so keep that in mind, as this may be premature.

In conclusion, not much to add beyond that.  Trade safe.

SPX and NYA: Near-term Potentials

Everyone should understand the big picture potentials by now, so today will focus on the near-term.

Friday's update offered a near-term option that turned out to be the only chart we needed (at least, for Friday's action):

Zooming out a bit, the near-term options appear to be as follows:

And then zooming out a bit more, if bulls were to get their ABC (either immediately or after another low), then it could lead to another leg for the rally.  (If bears are already in control, then we're already in a third wave that may not let bulls up for air for a while.)

In conclusion, the first half of Friday's near-term speculative count was a hit, we'll see if the second portion of that count works out too, but be aware of NYA's tag of the second line (above) and the "alt: bull c" option on the second chart.  Trade safe.