Monday, August 17, 2015

SPX, BKX, NDX: This Market Loves It Some Complex Corrections

Friday's update was a live, forum-only update, and anticipated SPX would make a high at either 2089 or 2092.  (Please note:  If you have recently applied to the forum, your account will be activated within the next 24-48 hours).  As of this morning, SPX has indeed reversed at 2092, and profits should be easy to protect or capture heading forward.

The overall pattern at this point is, quite frankly, an absolute nightmare to try and get an exact handle on, but nevertheless, I've tried to narrow down the options.  Let's start with NDX:

SPX is, so far, following the preferred path.  Whether it will continue to do so remains to be seen, of course, but starting off the day 10 points in the black is always a good thing.

The next chart shows the same count, but zoomed out a bit.  Do note that in the event that SPX cannot break 2078, more bullish options remain on the table.  Also note that we appear to be in an expanded flat, which wholly reserves the right to break 2078, then form a more complex (2)/B right back up to the high.  Not everything can be anticipated in advance...

Finally, I drew up this simple BKX chart back when the futures were still green on Sunday, primarily to help convince (or un-convince!) myself that shorting 2089 SPX was a smart move -- but I'll share it anyway, for educational purposes:

In conclusion, we're essentially still within the noise zone, which has lasted for the entire year, and it's getting harder and harder to interpret the near-term structure, due to the fact that there are simply too many options that remain technically valid.  So, boiling the preferred count down to its most basic common denominator, things are unchanged from the last few months:  The preferred intermediate count remains bearish.  It's primarily a question of exactly how we get there.

Note that the "best guess" is for near-term weakness, which is then bought back up north of Thursday's highs, as shown in the charts above.  Trade safe.

Wednesday, August 12, 2015

SPX Update: Potential of a Bearish Pattern Failure Looms

Since last update, the market turned at the second noted bear inflection zone, and this has cast a shadow on the "usual" expectation of the market reaching 2115.  It's possible that the pattern failed to generate the usual outcome, which can be a signal of an exceptionally weak market -- but due to the complexities of the noise zone, we can't entirely write off a trip to 2115 just yet.

We're just going to focus on the big picture chart today, which shows the potential of a bearish pattern failure (black "bear ii").  This pattern was expected to be run north of 2114, but stalled in last update's second noted "bear c of (2)" inflection zone. 

In conclusion, at the moment, there's very little to suggest that bulls are still running the show.  The preferred counts remain intermediate bearish, although there are options for complex corrections that give bulls a near-term edge.  Right now, though, the pattern is bearish until proven otherwise.  Trade safe.

Monday, August 10, 2015

SPX, INDU, NDX: No Suprises Today

Friday's update warned that it was time for bears to be cautious, and, indeed, it appears we'll have a significantly higher open this morning.

Keep in mind that we're still inside the Great Noise Zone of 2015, so there are a lot of near-term options inside this range.  The preferred option of the past few weeks probably has to continue to be given at least slight preference, and that's for a textbook "double retrace" that will now head back toward 2115 SPX:

Worth noting that the market reached a perfect 1.618 extension of the proposed wave A, which is often where a C-wave will bottom:

Keep in mind that if we are now currently in a C wave rally, as shown by the bull count on the first chart, then it will likely be fairly relentless for a while.  It's wise to wait until the target zone is reached, and/or we begin seeing impulsive declines before trying to go against it for more than a scalp.  And frankly, even scalping will be difficult against the trend on a C-wave.

This next chart is a bit ahead of the curve, and isn't relevant if we're in a second wave (as shown in the bear count).  But if we do indeed test/break the 2115 zone, then one option for an extremely complex pattern opens up -- as is shown below via INDU:

Finally, NDX also hints at the possibility of a C-wave rally.  The bear count here is the same: for a second wave, that could end roughly where shown by the label:

In conclusion, the intermediate picture remains bearish, but the near-term picture is a bit up for grabs at the moment.  If we get back to 2115+, then, the closer we get to the all-time-high, the more actionable it becomes (not trading advice!).  If we start to see impulsive declines from the bear 2 zone, then we might consider the possibility that the picture is even more bearish than shown.

Last update, I briefly covered the bull option, via INDU -- that option remains wholly viable, of course, so it's wise for bears to continue with a cautious approach; in the event that we reclaim the all-time high, then we'll have to give the bulls a bit more airtime.  Trade safe.

Friday, August 7, 2015

SPX and INDU: Time for Bear Caution

First off, I apologize for the brevity of the recent updates.  I promise a more detailed update this weekend.

Let's get right to the charts.  The last few days have been wonderfully-profitable for forum members, as I've been pointing out the turn zones on the board in real-time-- and (sorry to toot my own horn) have nailed most of the them quite accurately.

At this point, we're into a major inflection zone, since SPX has now completed the requirements for a double-retrace:

INDU is in a larger inflection zone:

The bear option for INDU is that we're in the process of forming a massive nest of bearish first and second waves.  Watch for sustained trade beneath long-term support for that option to become a significant potential.

In conclusion, we're at a major inflection zone for both the near-term, and the intermediate-term, as outlined on the charts.  Trade safe.

Wednesday, August 5, 2015

SPX and INDU: Market Reaches Inflection Point

On July 31, I published the following projection chart for INDU:

Here's how INDU's chart looks now, with the actual price action:

SPX below.  The bull count is a complete ABC decline (blue abc).  Below the 3/c level, and we're probably looking in the vicinity of black C as next potential support.

In conclusion, this is an important inflection point.  So far, INDU has tracked perfectly, which always makes me at least a little nervous.  The next session or two should be revealing.  Trade safe.

Monday, August 3, 2015

SPX and INDU: Ingredients in Place, Can Bears Make It Happen?

Last update projected an opening pop to a marginal new high in INDU that would be sold, and that's exactly what we got.  In a perfect world, to keep things simple, bears would like to see Friday's highs hold in INDU and SPX.  Another marginal new high would be okay, but the near-term bear counts would be cast into shadow if this were to occur.

We'll start with INDU:

INDU's hourly chart:

Below is a super-simple chart of SPX:

And finally, the SPX 1-minute chart does support the bear case:

In conclusion, while we can't be certain that a reversal began on Friday, bears do have all the correct ingredients in place.  There's not much else to be said.  Trade safe.

Friday, July 31, 2015

INDU Update: Market Enters Resistance

Yesterday saw the rally finally pause, but bulls bought it right back up again (or shorts did.  Someone did!).  Today, we're getting into territory where there could be some measure of resistance.  I'm going to let two charts from INDU do all the talking today:

And a closer look at the potential micro structure:

SPX would be expected to follow a similar path (preliminary approximate target for B-down in SPX would be 2070-80).  Unless the rally is going to tack on a fifth wave extension (which we can't predict in advance), then we should be in the ballpark where a correction would begin, ideally after an opening pop to a new high as shown on INDU's chart.  Trade safe.