Wednesday, July 18, 2018

SPX and INDU Updates: Market Approaching Upside Inflection Zone

Since last update, the market has crept higher, which was not unexpected.  We're now finally getting into a larger upside inflection zone, for the first time since June 15, which generated a reversal, so let's look at some charts:

INDU would look better if it ran a bit higher, but it isn't required, so here again, bulls should probably stay on their toes:

Big picture, it's been more than 6 months since I updated this chart, because the important support zone has continued to hold since then (so there was nothing new to add):

In conclusion, the market is in the process of reaching an upside inflection zone, so it will be interesting to see how it reacts to that in the upcoming sessions.  Trade safe.

Monday, July 16, 2018

SPX and BKX: Technical Jargon

Still nothing exciting to add, as the market has steadfastly remained in a condition that's most often referred to by its technical term: "a bunch of malarkey." 

"This market's a bunch of malarkey!"  We technicians can often be heard muttering to ourselves at such times.  More often than not, the next words out of our mouths involve elaborate plans to self-educate on spear fishing, but we never seem to get around to it.

On the bright side, I was able to get the SPX chart to load today.  On the "meh" side, there's still nothing to add and updating it was just a matter of moving the last annotation back onto the chart (it has slid off as the chart auto-updated itself).  We may or may not need another micro fourth wave correction and fifth wave higher; still depends on whether that last move was a triangle or not.  It is at least possible that there are roughly enough waves for the rally to be complete, though.

Still keeping an eye on BKX, as a sustained breakdown here would tend to look fairly bearish:

In conclusion, we're still watching for an impulsive decline before getting too aggressive in acting against this (now-multi-month) upwards-biased extended sideways grind.  Trade safe.

Friday, July 13, 2018

INDU and [chart not loading] Updates

Stockcharts is pulling some weird glitch where it won't let me update the SPX chart, but there's no material change there since last update anyway.  It did let me update the INDU chart, so let's look at that:

We can see that INDU was indeed the tell, warning bulls and bears alike to expect further grind, as I noted back on June 11.  It likewise stalled right where black "or (c)" was expected to complete, and has not declined any further since then.  The one concerning thing for bears about this chart is that IF INDU does head all the way north of red Y, where will that put SPX?  SPX is already above its similar high, so if INDU goes that route, it will be interesting to see if SPX can retest or break its all-time high in the process.  A lot can happen between now and then, though, so we'll see.

In conclusion, the bottom line is that, while I've continued to lean longer-term bearish, there hasn't been a solid sell signal since way back in March.  That signal led to the decline to 23.3K, where we were alert to the possibility of a bottom -- but since then, the pattern has kept near-term calls very speculative.  It's still a bit challenging to see how INDU escapes this mess without eventually breaking that 23.3K low, but the near-term pattern has remained a veiled chop zone ever since, and we can never entirely rule out the possibility that the market will find some way to turn bullish again. 

Thus all I can continue to do is what I feel like I've been doing for an eternity here:  Advocate patience until things clarify once again.  Trade safe.

Wednesday, July 11, 2018

SPX Update: A Ghastly Market

Let me just say this and get it off my chest:  Since the beginning of April, the pattern in SPX has been absolutely ghastly.  To be fair, we were probably a bit spoiled heading in, having rode the extended fifth rally higher for several hundred points during the second half of 2017, then hitting the top almost to the day, then riding the fast and brutal decline, and just generally catching most everything right up until April.

On the bright side, I haven't tried to aggressively call much since then, either -- so at least I haven't been screaming for any strong action at all during this time.  Which, while boring, at least isn't costly.

Anyway, here's where the pattern seems to sit now, but it's still leaving more near-term questions than it's answering:

In conclusion, this has been a difficult pattern to predict for the past few months, but that's the way this game is played, and everything could become crystal clear in a single session.  Until things clarify again, all we can really do to is what I always advocate at such times: Watch for an impulsive decline as a potential reversal signal, and try not to buck the trend too much before we get one.  Trade safe.

Monday, July 9, 2018

SPX and INDU Updates

Wow, I can't recall the last time I felt the near-term was such a mess that I went this long without even attempting a string of near-term calls.  We've been stuck in a trading range all year, so at this point, it's very easy to overstep one's bounds and try to read too much into the pattern, which is why I haven't been terribly aggressive on calls lately.  Eventually that will change, but until then, patience remains the order of the day.

SPX couldn't make a lower-confidence pattern if it tried:

In conclusion, this is the part of trading/analysis that just isn't much fun.  We sometimes have to wait out the dull weeks before the market turns clearly actionable, but that's just the name of the game.  As long as we preserve capital during these times, we'll be in good shape when the harvest comes.  Trade safe.

Friday, July 6, 2018

SPX and BKX: More Fun than a Barrel of Giant Sloths

The market's continued trading in a noise zone for the past (forever), so there's still nothing new to add.  It is interesting to note that perhaps SPX will make some attempt at symmetry before beginning to make progress again:

(Please note typo on this chart:  "2591" of course refers to the low at 2691.)

Or maybe bulls will stick save it here and use the last few weeks' grind as a base -- that's always possible, since 2691 has continued to hold.

BKX is likewise just barely holding its key zone:

In conclusion, assuming you haven't fallen into a boredom-induced coma yet, the market continues to look longer term bearish, but likewise has continued refusing to give much confirmation..  Trade safe.

Monday, July 2, 2018

SPX and BKX Updates

No resolution since last update, thought the steep late-day selloff on Friday might be of some concern to bulls.  So far, this hasn't behaved like anything other than the predicted downtrend.

Until last week's low breaks, though, there's no definitive resolution.  On that note, IF last week's low does break down, bulls will likely find themselves in a "pay me now or pay me later" situation, where even if there's a rally shortly thereafter, it would imply a corrective rally:

BKX is probably still a good canary here:

In conclusion, while all indications are that the downtrend is probably not complete (though a near-term bounce is always possible), so far there's still no definitive resolution to the pattern, so neither side should get complacent here.  Trade safe.