SPX and INDU Updates: First Downside Inflection Zone Reached

In the prior update, I wrote:  "most of these patterns suggest a fourth wave bounce is due, followed by lower lows," which is exactly what happened since.

SPX has now completed the minimum requirements for its pattern, having broken the low of the potential a wave (if this is an expanded flat):

And INDU, so far, has reached into the 43.2K zone, which is probably close enough to 43.1K, if it wants:

As I noted on February 18, this pattern could be called "the market hates everyone, especially you."  And part of the reason for that is, now we have to wonder if the pattern is roughly complete, or if we're dealing with the more bearish diagonal.  I continue to very slightly lean toward that idea that, since the upper line was not overthrown, the less bearish pattern is probably a miniscule favorite, but there's still no way to rule out the diagonal at this juncture:

If the diagonal were unfolding, then the recent decline could be wave 1/A down, with a larger bounce to develop for wave 2/B up, followed by an even more significant drop in 3/C down -- just so folks know what to watch for in that event.  Again, the diagonal would be expected to break the blue wave (ii) low at the minimum and could even turn considerably uglier (if it marked, for example, the end of the bull market, or even just the end of a high-degree wave).

In conclusion, the options now are:

1) The market is at or near the low of this move and will rally back up to new highs either directly or after one more low.

2) The market is resolving the diagonal, with wave 1/A down complete or nearly complete, to ultimately head more significantly lower.

In the event of the latter, we'll stay alert to a decent-sized three wave rally that stalls shy of the all-time high.  Trade safe.

SPX and INDU Updates

A couple updates ago, I outlined a potential ending diagonal, as well as the potential for a less devastating, but still near-term bearish, expanded flat.  Since then, the market has performed in line with both of those patterns, which is kind of "exactly what I was afraid of," because it's pretty difficult to sort one from the other.  Let's look at the diagonal first:

Since the diagonal didn't overthrow the upper line, I'm very slightly inclined to give a tiny edge to the expanded flat (below), which would normally be expected to test the lower blue trend line, or at least to break the low of 5923:

INDU broke its lower blue trend line and a sell-off ensued:

And INDU has now firmly broken down from the triangle, coming very close to its first target zone:

In conclusion, most of these patterns suggest a fourth wave bounce is due, followed by lower lows.  There's always an outside shot of the decline wrapping up early or what have you, but at present there are no indications of such.  Trade safe.

SPX, INDU, TLT Updates

The market is still roughly in the same place that it was near the high of December of 2024, but it could be getting close to doing something interesting, one way or the other.  Maybe.  If we don't light ourselves on fire first.

Since last update, SPX stalled right at the upper boundary of the theoretical "just because it's there" diagonal.  Note that a diagonal would *usually* be expected to overthrow that upper red line before reversing.  Again, this is not to say this IS a diagonal, just that's how they normally behave.  There's typically a "fake-out breakout" to run all the stops before the real damage ensues.  

But again "again" -- a sustained breakout on increasing momentum could signal a bull nest off to the races.

No change to the near-term SPX chart:

Next up is whatever chart I upload next (hang on a second).  Looks like it's INDU, which is flirting with its long-term blue line yet again:

Which means the next chart will be the near-term INDU chart.  Here, we see INDU fell out of the potential triangle, but no breakdown of the prior low yet:

Next up is a chart I haven't published in a few months.  The potential red 4 has so far held. 

Finally, another TLT chart, this one I haven't updated since April of last year... but it is interesting to look at now (I forgot to publish it back in November when I updated the chart above):

In conclusion, not a lot has changed since last update, with the market keeping everyone on their toes here.  Trade safe.

SPX Update: Welcome to Wherever You Are

Since last update, SPX made a new high, completing the warning from February 12 that bears would be in trouble if that morning's gap down ended up being bought back up.  This puts the market in an interesting position, with 3 main options, two of which are bullish, one of which is rather bearish.  

Let's see what I mean, starting with the near-term SPX chart:

So, to summarize the above:

1.  We have the most straightforward pattern (bull nest, big rally toward ~6300).
2.  We have "the market hates everyone, especially you" pattern (an increasingly complex flat back to blue, then up to another new all-time high).  I hate that these exist, because we always have to be aware of them as a possibility, which just convolutes everything.
3.  Then we have the "oh my, that got ugly fast" ending diagonal, which is covered in more detail below:

In conclusion, we have the main bases covered now, so it's just a matter of watching how the market responds, to add weight to which pattern is likely unfolding.  Trade safe.

SPX and INDU: The Presidents' Triangle Valentine

Today is Valentine's Day, named after the patron saint of beekeepers, so it's a good day to let your local beekeepers know you appreciate them by dropping off a box of honey-flavored chocolates.  Also, you're supposed to buy something nice for your romantic partner -- or, if you've been married a while, just remembering that this holiday even exists is a huge win, worth double points if you additionally remember to say something nice, ideally to your actual spouse.  Keep in mind that the market is closed on Monday, as a reminder that even Presidents have valentines.

Last update warned that it wouldn't be great for bears if the pending gap down was bought right back up, but that's exactly what happened.  On the INDU chart, it appears as yet another successful test of the long-term blue trendline:

On the near-term chart, INDU is developing a triangle look to it:

And SPX is still within its range as well:

In conclusion, the action over the past couple days hasn't looked great for bears... but, from a purely technical standpoint, they're not officially out just yet.  We'll see if they can mount a desperate last-minute stand or if bulls put a fork through them.  Trade safe.

SPX, COMPQ, INDU: CP-High

CPI came in hot (big shocker, since the Fed is still holding rates too low) and futures are not happy about this.

In the last update, I gave my (very slight) lean for another wave down, and this morning's premarket action seems to be providing that.

I'm not updating the COMPQ chart because it's in that mode where it deletes everything if I touch it -- but it's uncanny how well the blue path has played out, considering the trip down bottomed where it was drawn, ran back up, and now seems to have potentially topped right where drawn: 

If INDU follows suit, it may break that blue trendline, but bears should be careful if it whipsaws there:

In conclusion, this is the moment for bears to either make things happen or go back to hibernation.  If this morning's gap down gets bought right back up, then bears may not get another chance for at least a few weeks.  If it does not get bought... then the targets from Jan. 27 will remain alive.  Trade safe.

INDU, COMPQ, SPX: SPX Captures Target and Reverses, but...

So SPX topped almost dead center in its upside target range (6074-6128; high 6101) and reversed, but it's unclear what that wave down is supposed to be (i.e.- it's not a clear impulse, neither is it a clear ABC).  COMPQ, INDU, and NYA all reflect similar ambiguity (NYA is probably the closest to looking like an impulse, be even there, I can see an option for an ABC with an ending diagonal C wave).  

So this leaves us with: 

1) The market topped where it "should" have 

2) No confirmation that this means anything.

INDU bonked its head on the black trend line again:

And COMPQ is still right in the middle of no-man's land:

In conclusion, I wish I had better answers at this phase, but that last decline was not at all clear.  If someone held some gum to my head and threatened to stick it in my hair if I didn't give a lean (I prefer Big Red -- thanks!), I'd maybe go 50.5% to 49.4% that the market forms at least one more wave down, with the remaining 0.1% assigned to the probability of a world-ending asteroid strike to put us all out of our misery.  Trade safe.