SPX, NYA, COMPQ: In Case I Was Too Subtle

Not much new since last update, but I did want to revisit a statement I made back on January 3, because I sometimes convey things maybe a bit too subtly.  The statement I'm referring to specifically was the comment "for now, we'll give that lower weight."  What preceded that was a discussion of the bear options as the (implicit) "higher weight" value.  In other words, I've been suspecting that we've already seen an "end to the bull run for now, or even of the entire bull market."  That's the assumption I'm currently operating from, but I wanted to reiterate that, in case it wasn't clear from the comment I made on Jan. 3:

Beyond that, nothing to add to the SPX chart.  I still tend to suspect we're headed for a break of the prior low and hence the 5500s.  If bulls wanted to annoy everyone, they would create another wave up here, possibly as part of an ending diagonal c-wave higher (with i of c already completed, and ii of c the decline since).

Finally, COMPQ is also unchanged:

In conclusion, if bulls were going to pull out an upset, they're probably running out of real estate in which to do so.  As noted on the NYA chart, that can't be ruled out yet, but it does appear to be the underdog.  Trade safe.

SPX, COMPQ, INDU, NYA: Fairly Clear

Not much to add from the past couple updates, but we are increasingly seeing signs that bears may be able to run with the ball from here.  Let's start with COMPQ:

SPX tagged last update's blue trend line on the nose and then gave up:

INDU still remains below is key pivot zone:

And NYA continues to illustrate how the market could have recently completed a larger wave, perhaps at significant wave degree:

In conclusion, bears still haven't broken the key levels they need, but they are doing what we'd expect them to do if that was where the market was ultimately headed.  As noted on that SPX chart, that would suggest a trip down into at least the 5500s over the nearer term.  As INDU and SPX both also note, however, the zone above which bears might want to back off looks reasonably clear.  Trade safe.

SPX, COMPQ, NYA: A Critical Time

Friday was the type of "gap up and then stumble gradually higher day" that is known for its ability to cause traders to quit en masse and pursue new careers in less demanding fields, such as spearfishing, so there's not a ton to add to the prior update.  Maybe the most noteworthy near-term chart at the moment is COMPQ:

NYA is still in the same basic place as last update:

And SPX has now given itself just a little breathing room:

I'll add one more chart for consideration, but the caveats are outlined on the chart:

In conclusion, not much else to add from Friday's update.  This is potentially a critical time in the market, as bulls need to hold the general zone of the most recent lows.  A sustained breakdown could signal significant bear moves on the horizon.  Trade safe.

NYA, INDU, SPX: Happy New Year

Last update (December 18) warned that it was "getting hairy out there" and included this:

6035 can no longer be the bottom of wave C of a triangle. That low is either wave (a) of said C wave, wave a of a b/2 correction to the prior leg up, or a NESTED WAVE 1 down. In other words, bulls should be very cautious on a sustained breakdown of the blue "alt: a/1" low.

As it turned out, bulls did need to be very cautious and the nested wave 1 down appears to have been the reality, given the incredible speed of the decline after the breakdown of the blue alt. a/1 low.

The NYA chart I published then showed how the rally could be over if the final wave had been a diagonal, so let's update that chart now:

 NYA again:

INDU's chart contained a warning about the black trend line, and INDU remains below it, having so far backtested it and failed to claw back above:

Finally, SPX's chart is intended to help cut through the noise:

In conclusion, it is indeed possible that the bull market has ended, but it's very much up in the air yet and not a forgone conclusion.  So, bulls should be very, very cautious, but they're not dead by any means yet.  The charts above will help with determining where the market heads from here.  Trade safe.

NYA, SPX, INDU: Getting Hairy Out There

Okay, so since last update, a few things have happened.  Let's start with NYA, which topped and reversed where I'd anticipated, but then just kept dropping:

The two main options for NYA probably look something like this:

Next, we have INDU, which is back to its key breakout line:

Finally, the near-term SPX decided to also get a little goofier.  I haven't updated the chart, because there are too many options now -- but 6035 can no longer be the bottom of wave C of a triangle.  That low is either wave (a) of said C wave, wave a of a b/2 correction to the prior leg up, or a NESTED WAVE 1 down.  In other words, bulls should be very cautious on a sustained breakdown of the blue "alt: a/1" low.  Note that under the most bullish counts, that low could break somewhat, without too much technical damage immediately, but it would certainly be cause for caution.

In conclusion, the market apparently got wind of my holiday schedule and is trying to make things interesting to keep me from relaxing.  Which brings me to: I'll be traveling with my family starting tomorrow and running through Christmas week.  Due to the way the calendar lays out this year, there are only 4 remaining Monday/Wednesday/Fridays that don't fall on holidays anyway, so I'll be taking those off and returning after the New Year.  I wish everyone a safe holiday, a Merry Christmas, and a prosperous New Year.

In the event there's something Earth-shattering going on toward the end of Christmas week, I may try to publish a special update.  But I'm really hoping that's not necessary just yet!  Trade safe, and have a great holiday!

SPX and COMPQ: Interesting Things

Since last update, SPX declined, but bulls held the level they needed to hold (so far) and SPX remained range-bound.  Eagle-eyed readers probably spotted the triangle I drew (in red) in the last update -- and while SPX went a hair below the speculative line I'd drawn, it's still within a range that makes a triangle possible.  The chart discusses this further (annotation in red):

The triangle could also serve to draw things out through this week; to culminate next week in the potential "Santa Rally" I mentioned a couple weeks back.

COMPQ bears a similar motif, where another high would potentially complete a wave at some degree, and hence be followed by a correction (or worse):

I'm also going to reprint the old "extended fifth" target SPX chart, because it's relevant to the discussion that follows:

In conclusion, both SPX and COMPQ presently still appear slightly more likely to need another high, but be aware that if 6029 fails significantly, it could signal earlier problems for bulls.  

It's interesting that things do seem to have aligned to where both markets could complete a larger wave with one more high, and thus could both fall into a larger correction afterwards.  The only dark spot on this outlook is that SPX might then fall short of its longer-term "extended fifth wave" target in this scenario.  But there are ways for SPX to get around that, such as with the "one more high" it appears to need ending up extending itself and blowing past the targets... or with another new high completing a smaller degree fifth wave and leading to a decent fourth wave correction that ultimately later resolves with another new high of its own.  So, we'll have to play it by ear a bit if the first portions of this thesis play out and adjust as well as we can in real-time.  Trade safe.

SPX Update: Bullish Sentiment, by One Metric, Hits All-Time Highs

Since last update, SPX confirmed the downside inflection zone and its pattern provides some guidance for the near-term going forward:

Before we revisit the big picture chart, I want to discuss a couple of interesting sentiment indicators.  First up, investors are currently insanely bullish.  This is traditionally not a bullish signal, the thinking being that people act on their beliefs.  When people are bullish, it usually means they've already acted on that and bought stocks.  When "everyone" is bullish, then the implication is that "everyone" has already bought -- which would mean the market is running out of fresh buyers to keep driving prices higher.

The percentage of people who think stocks will go higher over the next 12 months just hit an all-time record high, going back to 1987:

Next, insiders are selling at record numbers.  This is a weaker indicator, because we can see by the high bars in red that insiders don't have a great track record of picking tops and often sales volume peaks months or even years before the market does.  But, in context of everything else, it's interesting, nonetheless.

I bring these indicators up because they seem to provide at least some degree of fundamental support to the long-term SPX chart:

Of course, the Fed seems hell-bent on cutting rates again and possibly reigniting inflation, so we'll see how that goes, but for now, all this is worth watching.  Trade safe.