SPX, NYA, COMPQ: Obligatory Bull Count

The market continued rallying since last update, and while the strength of the rally took many bears by surprise, the location of the bottom was pretty well telegraphed in the charts earlier.  On October 4, I mentioned that NYA had captured its standing target from September 7 and wrote: "targets often act as support/resistance, so this could lead to a near-term bounce."  With that, I placed the 3/C label (with a ?) where it still sits today:

If memory serves, I actually wrote about this inflection zone months ago, predicting at the time that we'd reach the 3/C inflection with no overlap of the prior wave 1 high in SPX, leading to a time where everything was in limbo.  (I'd quote it here, but I don't have time to search that deeply at the moment.)

On the rally end, so far SPX did continue higher (as noted was possible last update) and has not overlapped blue 1 (SPX has a slightly different appearance than NYA):

COMPQ is still below blue resistance:

Bulls, of course, are clamoring for "their" count, so here's the most palatable "bull" count I can currently find:

In conclusion, the strength of the bounce has given many bears pause (paws?) and I'd be lying if I didn't say it has at least made me wonder.  This type of rally strength can sometimes indicate a meaningful bottom.  For the moment, though, there's nothing in the charts to invalidate any of the bear options, so I'm continuing to lean that direction for now.  Trade safe.

SPX, NYA, COMPQ: Not Just Financial

Way back in March of 2022, I wrote a bit more about the Supercycle collapse (which I believed/believe had/has already begun) in order to help get people thinking about the types of things that could happen, and to hopefully inspire them to prepare:

Bigger picture, the bear case hasn't changed, though I have included some ballpark numbers on the chart below. The question I always ask myself in parallel with such numbers is, "What would have to happen to take SPX to [for example] 2200? What is going on in the world as the market falls?" Because we have to remember, especially when dealing with Supercycles, that these things do not occur in a vacuum. If the market crashes, there are things going on outside the market that will be "causing" the crash. 

And when it comes to Supercycles, those events can be truly dramatic, as I've often discussed in the forum. During a Supercycle crash, the door is open to events such as major natural disasters ("big one" earthquakes, Cascasdia Subduction Zone tsunamis, etc.), world wars (or even something at a smaller scale but still massively devastating, such as a "backpack nuke" brought up through our less-than-secure borders and detonated downtown in a major US city), comet impacts -- things of that nature. Things that we tend to blindly assume can't happen in modern times, but most assuredly still do. Those types of events can, and usually do, run in close proximity to Supercycle crashes. 

Anyway, I don't mean to sound melodramatic, but when we start asking ourselves the question ("What could be happening in the world to cause the market to react so negatively?"), we probably won't like the possible answers. As I've always said: Charts lead the news.

Outside of that brief mention of "world wars" above, I don't think I've written about war much on the blog, but on the forums, I've discussed many times that wars are to be expected during Supercycle collapses.  Implicit in the idea of a Supercycle collapse is a shakeup of the world power dynamic -- especially when the collapse is occurring in the global superpower (the United States).  As America continues to weaken financially, economically, militarily, and morally, the Pax Americana naturally comes under fire as other powers look to capitalize on our weakness.

I have repeatedly warned that Supercycles take years, sometimes even decades, to unfold completely and that this bear market would not be like the other bear markets of living memory.  It's now been almost two years since the all-time high in SPX, and there's still a lot more to come, in my view.

During the first week of January (2023), I published the following thoughts:

I still remain of the opinion that this is the start of a Supercycle collapse, meaning that the worst is yet to come. Despite how some investors are undoubtedly feeling, in my view, things haven't even begun to get "bad" yet. We're still in the stage where bears are having fun (!). We'll know we're getting closer to the bottom when even bears are hoping and praying for good news and rallies, because everything will be teetering on the brink of complete destruction -- and not even bears want to see that. I likewise remain of the opinion that the current collapse is not solely a financial event.

We are more able to see the seeds starting to sprout a bit now, but we are still nowhere near the point where "everything [is] teetering on the brink of destruction."  We can speculate on what that might look like, but just remember that nothing is off the table for us during a Supercycle collapse.  Things that would have seemed impossible a few short years ago, such as a nuclear conflict, are no longer impossible.  

Supercycle declines are not just financial, they are cultural, and they are geopolitical.

To avoid negative consequences, we have to tread far more carefully than our leaders are currently doing -- but then, if they weren't arrogant and complacent, we might not have entered this Supercycle in the first place.  So, Catch 22.  Worth remembering that Rome grew so arrogant and complacent that its leaders refused to believe barbarians were capable of conquering them even after entire cities had fallen.  If our leaders were in touch with the times, they'd have a far more protectionist attitude about our finances and resources, instead of borrowing as if interest rates were still zero and lunging about clumsily as if the world was still stable and as if we were still in a position to do anything about the growing instability.  

Things have changed, but our leaders' attitudes have not.

Anyway, my point is not to be fatalistic, but simply to remind everyone that we're still in the early stages and things can get a lot worse than they currently are, so it's not a bad idea to prepare.  Don't be among the complacent.  Because we're nowhere near the bottom yet, in my opinion.  Whatever it is that you think can't happen, won't happen, would never happen here -- it absolutely can.  Plan as if it might.  Worst case (or best case?), you're overprepared and everything ends up fine.  No real harm done.

Let's move on to the charts.

NYA:

COMPQ:

And what currently appears to be the "most bullish" option for SPX (4 can run even higher than shown):

Of course, there are other options for the shape of blue 4 above, including the option to end immediately.  There are, of course, larger, intermediate bull options, but as promised, I'm not giving much airtime to them until the market gives better reason to.  Trade safe.

Oil, SPX, NYA, COMPQ Updates

Let's start with oil, since I've received several requests from oil bulls to, quote: "REMOVE THAT STUPID B LABEL ALREADY!!"  Back in March, I drew this oil chart and placed the red "b?" where it is:

Then, over the subsequent half a year, oil rallied all the way up to that label, hit the bottom of the "b," then reversed hard.  Oil bulls are now blaming me for this reversal, since (according to them) it's obvious on the chart that my "b?" label is simply blocking oil's advance:

So, I'd like oil bulls to please understand that, while it may seem like it's my fault for placing that b-label where I did, that's just where it looked like oil wanted to go, and where I thought it would be forced to decide what it wanted to do next.  Labels aren't physical things that can reverse rallies, they're just ideas in my head.  So, I'm just the messenger, really.  Please stop sending me messages now.

Next up is NYA, which has so far failed to recover the black channel and is thus still hanging around in dangerous waters:

COMPQ is now below all its near-term support levels:

No change to SPX so far:

In conclusion, no real change to anything.  We do remain in "potential 3rd wave" territory, so stay alert, as third waves are often crash waves.  Trade safe.

Where Do We Go from Here (Now That All of the Children Are Grown Up)?

America is getting progressively dumber at an alarming rate.  This is happening both literally...

And anecdotally.  Both of these next two items are screenshots from the U.S. Treasury official website.  Item one:  

Since we need to borrow almost a trillion dollars this quarter (I believe it's over a trillion if you count SOMA), you might think that would prompt some soul searching as to whether continuing to increase taxpayer debt is sustainable in a "not low" interest rate environment (we're not even in a "high" interest rate environment, unless one's baseline is the last 15 years).  But you'd be wrong.  Instead, we're going to waste even more precious resources and money we don't have producing detailed reports about issues that we have zero control over (aka: "the weather"):

These are only three examples of the types of news items you and I see every single day that cannot help but cause us to question what the hell this country is doing.  It's as if there's a massive tsunami headed straight for us but, instead of making any effort to prepare or even acknowledge its existence, we're busy arguing about whether Coke is better than Pepsi.  And we're getting REALLY HEATED about that argument.  As if that's something that matters more than, say, the fact that we're going to be crushed by interest payments on the debt, or the fact that banks are holding tons of questionable assets, or the fact that our actions on the world stage are uniting our worst enemies in common cause against us, at the exact same time that we're weakening ourselves both financially and militarily (some of our munitions stockpiles will take over a decade to replenish -- and that was as of January), and the fact that historians may well look back on this time in history as "the Start of World War III."

Along with a million other serious and, more importantly, real issues that we're completely ignoring. 

Something to think about as they test the emergency cell phone alert system later today.  (Meanwhile, Russia ran nationwide drills for nuclear war yesterday.  I'm sure the timing of both of these things is purely coincidental.  Don't give it another thought.)

Anyway, NYA captured its target from two months ago (typo says "Sept. 7," but the target was from August 7):

And SPX is tracking this "roadmap" chart (not updated since September 22) well so far:

Other than mentioning the target captures (targets often act as support/resistance, so this could lead to a near-term bounce), there's no change from recent updates.  Trade safe.

SPX, NYA, GOLD: This is a Little Weird

Last update opined that the "most likely" scenario was for the current bounce to be a fourth wave, and nothing has happened to alter that so far.  Worth mentioning that NYA back-tested its noted broken trend line and was rejected.  Another test of the zone near that line is not required, but would be perfectly normal:

Next, SPX didn't quite reach the green line -- but again, another go at it, if it happens, shouldn't surprise anyone:

Very long-term, SPX is now below its key blue line:

Finally, I was looking through last year's chart book, and I just had to share this, because it's weird.  First, remember back on May 3, 2022, when I published this chart?  (I actually drew the chart in April 2022, but didn't publish immediately.)

So here's what's weird... this is the chart as it looks in my old chartbook now:

Anyway, (3)/C's timing seems a bit aggressive to me from where I sit now, but sometimes these charts almost draw themselves and can end up being smarter than me, if that makes any sense.  So we'll see how that goes.  But, however (3)/C goes, the timing of (2)/B (timing is not something I put any conscious thought into) seemed just a bit unreasonable to me.

Oh, almost forgot, gold has opened an option worth being aware of:

In conclusion, presently, the pattern still suggests that the current bounce is most likely a fourth wave, to be followed (after it completes) by a fifth wave below last week's low.  If anything changes there, we'll discuss that as appropriate.  Trade safe.

SPX, NYA, TLT: SPX Captures Target 1; TLT Confirms Long-Standing Count

As another one bites the dust, I was finally forced to move away from the 80s-music-themed titles.  Let's go right to the charts, starting with NYA:

SPX captured and exceeded Target 1 from Sept. 8:

Bigger picture, SPX is bouncing off the red trend line:

There is resistance several places overhead, with 4350ish as a standout:

And last but not least, TLT has finally confirmed my wave count from 2022:

In conclusion, bulls do have some options here, but for now, the "most common" situation would be for the current bounce in SPX and NYA to be a fourth wave.  If things get squirrely, we'll take a closer look at the bull options.  Trade safe.

SPX and NYA: You Might Think

Not a whole lot to add to the past few updates, but a couple charts are worth looking at anyway, starting with NYA, which suggests new lows are still lurking out there, one way or another:

SPX is in a similar position:

In conclusion, the most likely resolution for these patterns is ultimately lower.  Which really isn't adding anything to the past few updates, but the charts "show the math," so to speak.  Be aware that this is potentially dangerous territory for bulls, as unless they can reclaim some key zones, an acceleration of the decline in the fairly near future is very possible.  Trade safe.