Friday, January 20, 2017

SPX Update: Next Break Could Finally Be Significant

Ran a bit short on time tonight, but the charts have all the info, so I'll let them do all the talking.


In conclusion, nothing to add beyond the annotations on the charts -- except a quick reminder that everything moves in cycles, including personal wealth advancement.  Allow yourself room to breathe within those cycles -- try to slow down when your personal cycle is on a downswing, and run with it when it's on an upswing.  And trade safe.

Wednesday, January 18, 2017

SPX and BKX Updates: Obama Signs Last-Minute Pardon for the Algos

My title has nothing to do with anything, I'm just tired of writing titles that basically say: "Still a Chop Zone, Huzzah!" Which is what has led to titles such as last week's: "How Much Wood Could a Woodchuck Chuck if a Woodchuck Could Chuck Norris?"  And so on.

Last update expected the market would open higher and then reverse, and that's what happened.  BKX in particular did so in a rather dramatic fashion, likely trapping many unsuspecting bulls into a loss:

SPX didn't reverse quite as suddenly and dramatically, but reverse it did:

Bigger picture, we're still stuck in the same spot we've been in since last year:

In conclusion, the market is keeping its near-term options open, but I'm still slightly leaning toward a continuation of the complex correction.  Bigger picture, the trend remains up, and even if we get the more bearish (C) wave, I expect that will then be bought up to new highs.  So, bottom line, no matter what happens from here, I am anticipating a continued rally, the only question is how we get there.  Trade safe.

Friday, January 13, 2017

SPX and BKX Update: What Will Friday the 13th Bring for the Market?

Today is Friday the 13th, so you're probably expecting I'll make bad jokes about good luck, or good jokes about bad luck, or something.  But you'll be sorely disappointed.  My only Friday the 13th joke goes like this:

- Knock, knock.
Who's there?
- Friday the 13th.
Friday the 13th who?

And that's it, there's no punchline.  That's the whole joke, and it makes no sense whatsoever.  I think I first read it on the back of a cereal box, during an unusually vivid dream I had -- so you can rest assured I won't be telling that joke today!

Anyway, the market has continued to chop everyone up and spit them out while laughing hysterically.  The last breakout whipsawed, and the recent breakdowns have done the same.  For what it's worth, the pattern doesn't appear complete to the downside, so most of the time we'd expect another low here -- which hints that the black (C) wave might be playing out.  Here's a near-term chart in detail:

The slightly bigger picture chart below shows that red 4 has been invalidated:

BKX seems to confirm the idea that the decline is difficult to count as complete:

In conclusion, in most markets I'd be fairly confident of another new low -- in this market of the past couple months, it's hard to be fairly confident of much of anything.  At this point, I'd say the near-term onus is on bulls to prove this is something other than a near-term bearish pattern.  Again, from a bigger picture standpoint, I do expect the black wave (C) bottom (presuming that pattern is actually underway) to be a buy op.  Trade safe.

Wednesday, January 11, 2017

SPX Update: If a Woodchuck Could Chuck Norris

*Preventative Note in Case Chuck Norris is Reading:  The title is not meant to imply that a woodchuck COULD Chuck Norris.  Only Chuck Norris can Chuck Norris.  Nor is the title asking:  "How much wood could Chuck Norris chuck if Chuck Norris could chuck wood?"   Everyone knows Chuck Norris can chuck ALL the wood, if he wants.  Along with all the woodchucks, for that matter.  Please don't hurt me. 

I can't recall the last time I've written "No material change," "nothing to add," "no real change," and "please don't hurt me, Chuck Norris" as often as I have over the past month or so.  That's largely because this market has remained slightly less exciting than flossing your cat's teeth would be, presuming you have a cat, and presuming that cat does not wear feline dentures.  This has gone on for what seems like an eternity (the trading range, not your cat's much-needed teeth flossing), especially after the rocket-launch rally that came before this extended chop zone.

So, with that said, there's only a little tiny bit to add since last update.  Basically, the complex (B) and (C) waves still look pretty viable.  If 2263 fails, then traders should be on high alert for a decline back below 2233 -- and if 2233 goes, then even the 2200ish zone isn't out of the question.

Note that SPX dipped below the blue trend channel as of yesterday's close.  Bulls want to see that channel reclaimed.  Bigger picture, there's also no change, and it is still presently assumed that the black (C) bottom would be a buy op for an eventual trip toward 2400 SPX.

In conclusion, the complex black ABC that I first warned about on December 30 continues to look like a viable possibility.  To negate that option, bulls need to clear this chop zone with a little more energy than they mustered (mustard?) on January 6.  Trade safe.

Monday, January 9, 2017

SPX Update: The Cheese Stands Alone

On Friday, SPX finally broke back above 2277, thereby validating 2233 as the bottom of ALL OF C (and validating my belief that this was all just a correction and not the start of anything bearish) -- but not yet eliminating the possibility that that first ABC merely marked a larger (A) wave. 

One of the blessings and curses of B-waves is that they can exceed the prior relevant high or low, which makes them the wave that bulls hate to see on a breakout, and the wave that bears hate to see on a breakdown.  The "blessing" part of B-waves is that they offer high odds that the market will ultimately turn back around and reclaim their peaks/troughs.  But they do require patience, because the nasty C-wave that follows a B-wave can and will shake most people who attempt an early knife catch.

(Note that I'm not saying the (B)-wave is what's going on here, I'm simply expanding on the commentary about B-waves in general.)

In any case, the next couple sessions should give us clues as to whether we're dealing with a simple fourth wave (red 4), or the more complex nastiness of the larger black (A)/(B)/(C).  If we see a larger impulsive down move develop, or if SPX sustains a breakdown at 2263, then the complex (A)/(B)/(C) gains some favor.

Bigger picture, there's still no change unless and until the market says there is:

In conclusion, as Market Watch would say:  "The Dow Jones Industrial Average Ordinary Mediocre Almost Barely Nearly Possibly Sort of Reached Really Super-Duper WOW OMG OMG Close to 20,000 on Friday and... Like, What Were We Talking About Again?" 

Trade safe.

Friday, January 6, 2017

SPX Update: Edwards and Magee...

Last update noted that an immediate breakout over 2263 should lead to a retest of 2273, and that was what happened.  The bigger picture is unchanged, with SPX 2400 still in the cards unless and until the market suggests otherwise.  And until the market suggests otherwise, the main question is how much more goofing around the market will do in the current price zone before its next "for real" move, so we're just going to look at the near-term chart today, along with some of the relevant levels:

In conclusion, there's been no real change since November, even though the market has spent the last month trading inside the famous Shake, Rattle, and Confuse 'em Pattern, which was first recognized by Edwards MaGee and Molly during a 1951 broadcast of their popular radio series of the same name.  Or... wait.  Part or all of that might be wrong.

No matter!  The point is, we have levels to watch now.  The worst move for everyone here would be a (B) wave that breaks the prior high before reversing into a (C) wave, but bears have to be very, very cautious if there's a breakout, because if no B-wave materializes, this consolidation/continuation pattern could be entirely complete, and the market might not look back on a breakout.  Trade safe. 

Wednesday, January 4, 2017

SPX Update: 2017

Well, 2017 is finally upon us, like a thing that falls upon another thing or something (writer's note:  go back and edit this to a more poetic image if there's time).  Interesting to note that we're now five full years past the Apocalypse that was supposed to occur in 2012 (according to someone's interpretation of the Mayan calendar), and all we really got out of it was a few crummy movies.

SPX was clearly excited about 2017, and opened the New Year with a gap up.  One potential near-term path is discussed below, along with some additional levels and where they may lead:

The black (A)/(B)/(C) shown above is still just a hunch, and may or may not come to pass -- but I think it would be a nice confuser and a fitting way to get bears excited and shake some bulls off the rally before it continues higher.

Still no change to the big picture:

In conclusion, near-term, keep in mind that SPX is currently within an established trading range, which means predicting its near-term behavior becomes more difficult.  Trading ranges have the effect of "loosening" all the patterns that show up inside the boundaries of that range, so those patterns rarely lead where they would typically be expected to lead.  Bigger picture, there's still no material change.  Trade safe.