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Monday, March 18, 2024

SPX Update

On Friday, bears finally managed to get below the blue trend line, but as I wrote in the last update:
at this point, it's not impossible for the market to drift sideways through it without doing much technical damage, which is why I (today) added 5119 as relevant; probably even more relevant than blue now. Though even 5119 isn't unrecoverable for bulls, sustained trade beneath it would at least be a "start" for bears.
Thus, today will probably determine if bears are going to do anything with the situation:


Really, not a lot to say beyond that and everything I've said over the past weeks -- for now.  Trade safe.

Friday, March 15, 2024

SPX Update: Two Wrongs Don't Make a Right, but Three Rights Make a Left

Since last update, SPX again tested the previously noted blue support line, and it again held:


On March 11, I called out the blue line as the first zone bears would need in order to start turning things a bit more in their favor, and the market has since shown the value of that line -- however, at this point, it's not impossible for the market to drift sideways through it without doing much technical damage, which is why I (today) added 5119 as relevant; probably even more relevant than blue now.  Though even 5119 isn't unrecoverable for bulls, sustained trade beneath it would at least be a "start" for bears.  Trade safe.

Wednesday, March 13, 2024

SPX Update: Title Goes Here

Not much to add market-wise since Monday's update, so I've just added a few comments to the short-term SPX chart:


The next version steps out one degree to examine the trend lines at the next larger time frame:


Not much to say beyond that today.  Trade safe.

Monday, March 11, 2024

SPX, COMPQ: Putting Out the Fire with Gasoline

I normally don't comment on the machinations of politicians, but this is relevant to the market, particularly as it relates to the Fed and to inflation.  

In his State of the Onion (a million years ago, when my little sister was just learning to read, we were in the car one day and she was trying to read every business sign we drove past.  We passed "Union Bank" and she dutifully recited, in her monotone, "Onion Bank" -- and my parents and I laughed.  But, unbeknownst to me at the time, my sister had unwittingly doomed me to constantly call union "onion" for the next 40 years and counting.) Address (yes, we're still in the same sentence here!), Biden proposed that "instead of waiting for inflation to come down," he wants to give away a bunch of money to homeowners and wannabe homeowners (i.e.- presumably to everyone) immediately.  

Most of us who didn't flunk Econ understand that flooding the money supply with more dollars is the exact thing that causes inflation in the first place (see: Covid stimulus, Fed printing, etc.).  Printing more money without a corresponding increase in production doesn't create wealth for the same reason that printing more first edition Superman comics would drive the value of each comic down:  The more abundant a resource is -- be it comics, gemstones, or cash dollars -- the less each unit of that resource is worth.  For this reason, printing money only makes existing dollars worth less (new money, without production, has no choice but to steal a portion of the value from existing money, which is the one and only reason newly-printed money is assigned any value at all).  We experience this at the ground level as goods and services costing more -- aka: inflation.  But really, goods and services haven't gone up, the value of our cash (and our savings, and our wages) has instead gone down, so it takes more dollars to buy everything.

Anyway, this proposal, were it to pass, is a sure-fire way to create more inflation.  And probably to drive the cost of housing up even further in the process, to boot.  Hence today's title.  To frame "more free money" as some sort of solution to inflation is akin to suggesting that more water is a solution to drowning.  So, it may be relevant to keep an eye on whether this proposal gains steam or not, because if it does, it will likely force the Fed to keep rates higher for longer.

Market-wise, we had a down day on Friday, coincident with COMPQ hitting next resistance -- but bears still have work to do to make it more than that:

COMPQ first:


SPX, which discusses what bears would need to do next:



And, just because it's out there, a little discussion on some bigger-picture bull and bear options:



That's it for today.  Now, using politician logic, I'm going to go conduct an experiment to find out if pouring more water in a clogged sink will finally stop it from overflowing.  Trade safe.

Friday, March 8, 2024

SPX Update: The Trend is Your...

On February 26, I wrote: 

[T]o my way of thinking -- at least for the time being -- it's just a matter of following the trend until we get another impulsive decline to signal a possible short-term (or longer term, if it's a larger impulse) trend change.

And there's been no change to my stance.  So there really hasn't been a whole lot to say (since I don't like to repeat myself too often) in the weeks since.

Last update noted that SPX had finally formed an impulsive decline, but also that there were reasonable odds it was just the C-wave of an expanded flat, and hence the end of a correction and not the start of one.  The indicator that bears would have needed (in order to tilt the field their way) was a break below Tuesday's low, but that never came:


Beyond that, not much more to add, still... for now.  Trending markets can be a bit boring.  As the old saying goes, "We contend:  The trend that's your friend may extend and append, so don't condescend lest your bowels distend."  Or something like that.  Trade safe.

Wednesday, March 6, 2024

SPX, COMPQ, INDU, and The Big Lebowski

(Warning!) Random thought/rant:  Yesterday I was watching a show and heard the expression "your truth" -- and it occurred to me that this expression is essentially an oxymoron.  "Your" implies subjective possession, but "truth" transcends subjectivity and exists independent of you and me.  Thus, the truth cannot be predicated with "your."  Either something is true or it isn't, regardless of whether we believe it or not -- we don't own the truth even if we manage to align our personal beliefs with it.  And it continues to exist for anyone to discover, even after we're 6 feet under.  Thus, there simply is no such thing as "your" truth or "my" truth.  

Instead of "your truth," we used to say "your opinion," which is the proper way to express the underlying reality.  This may seem nitpicky, but clear language allows us to think (both individually and as a group) with accuracy.  Further, two incorrect beliefs are smuggled into the conversation, and into our thoughts, with the expression "your truth":
  1. Whatever I believe is elevated to being reality, regardless of whether it aligns with reality or not.
  2. Objective truth doesn't exist (the word "truth" is being quietly redefined to mean "opinion," which means (if we accept that, tacitly or otherwise) all truth is just, like, your opinion, man.).  


Anyway, I'm against destroying the language, because it destroys our ability to communicate, which in turn destroys our ability to think and act collectively.  Which can only lead to society moving backwards.  

Rant over.

Yesterday, the market dropped for a minute or two, but it's unclear if that means anything, even for the near term:



Bigger picture, INDU continues to suggest that bulls will maintain control at the larger time scales for the time being:



COMPQ is near a zone that could act as resistance for a time:


That's about it for today.  Trade safe.

Monday, March 4, 2024

SPX Update: ______ ___ _______ __ __________!

Last update gave a nod to the old adage: "never short a dull market," and that proved to be valid wisdom for Friday.  Today could see the market correct some of those gains, but again, there's just not much more to be drawn from the near-term at the moment.  I'd rather let the market lead than try to force my own biases onto the charts and "see what I want to see," so I'm continuing to take it as it comes until a pattern reveals itself in a more concretized fashion.



As I've covered all the bases and hit all the beats at various time frames over the past week or two, there's not much to add beyond that, for now.  Trade safe.