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.

SPX Update: Targets Captured, and Caveats

Last two updates warned that there could be a fourth wave down about to unfold, and the market since made good on that, reaching (and exceeding) both its downside targets.

From a near-term perspective, things get a little tricky here.  I expected this decline to be wave c of an expanded flat, because I suspect the all-time high is a b-wave -- so I expected this to be an impulse down.  Which it is.  But that means if the high is NOT a b-wave, we have, you know, an impulse down.  Which would mean the correction would need another impulse down, if my read of the high is off.

In conclusion, the market behaved as expected, but since I can't be 100% sure of anything, including my own existence, the impulse hanging there on the chart makes it a tougher call.  So:  In the event we see a three-wave rally and a reversal, then we should be guarded.  If the high is indeed a b-wave, then the market would rally to new highs from here (technically, it could support one more small wave down, but that looks less likely -- I mention it to make readers aware that this count remains unscathed if there is another small wave down).  Trade safe.

SPX and COMPQ Updates

The last few updates have noted that SPX probably still needs at least one more 4/5 unwind higher, and last update offered COMPQ as evidence of this:

For now, this remains the presumption.  Last update also noted that SPX could have a fourth wave unwind on deck, and it's at least possible that's what's happening now:

In conclusion, if bears can sustain a breakdown at 6079, then SPX could be unwinding a fourth wave, with first targets as shown on the SPX chart.  Beyond that, not much else to add to prior updates.  Trade safe.

COMPQ and NYA Updates

Since last update, no change to my lean that SPX probably still needs at least one more small 4/5 unwind up, which could unfold now if it so chooses.  COMPQ appears to possibly need two more 4/5 unwinds:

NYA (pronounced "nyah," as in "nyah, I don't want any more coffee right now.") is tracking the first blue line fairly well so far (the first one, being the immediate future on the day I draw it, is always the easiest, so expect some deviation down the line):

Other than that, still not much to add.  Be interesting to see if SPX elects to play out its fourth wave now (some indications that it might, but nothing concrete), or if it instead extends its current wave.  Trade safe.

SPX and NYA: Santa Something

The last two sessions were pretty boring, so still not much to add to the past few weeks of updates.  Something akin to a Santa "rally" (or at least a Santa sideways-up move) is possible, if NYA follows this at all:

SPX is inching closer to the ol' extended fifth target zone:

I mentioned in the last update that I'm leaning toward SPX still needing at least one more 4/5 unwind higher, and that's still out there, as no appropriate 4th has developed since that update.  Trade safe.

SPX, NYA: Have a Nice Day

Since last update, SPX confirmed my read that at least one more small 4/5 unwind higher was needed:

Due to expanded flat potential back at the 2nd wave, it's possible that no more 4/5s are still needed, but because the latter portion of the 2nd wave looks like a three (it would need to be a five were it an expanded flat), I'm presently leaning toward the idea that there will be another.

NYA discusses the two most obvious bigger picture options (added the red annotation today):

Beyond that, still not much to add to the deeper dive updates of the past few weeks, except to note that I just learned that I missed the opportunity (a couple weeks ago) to call out November 19, which is apparently "Have a Bad Day Day."  I'll probably forget by this time next year, so, having just learned this useless fact, I felt obligated to share it immediately.  Anyway!  Trade safe.

SPX Update: Three Down Confirmed

SPX finally made a new all-time high, which confirms that the decline was just three waves down (as suspected on Nov. 18) and not an impulsive turn lower:

I've published a lot of long-term charts over the past week or so, so there really isn't anything to add on that front, but here's the SPX extended fifth chart again anyway:

In conclusion, until there's an impulsive turn lower, there's really not much else to do other than keep tracking the uptrend.  Trade safe.

Oh, p.s.- I typically take the Friday after Thanksgiving off, since it's a short session and it gives me a bit more uninterrupted time with my family over the holiday without "thinking market thoughts," so I'll likely do that again.  Happy Thanksgiving to everyone!