Wednesday, July 1, 2020

SPX Update: No Material Change

Not much has changed since last update, except to note that SPX has rallied right up to the confluence of the red and black trend lines on the prior chart:

If blue B/2 is going to remain simple, then SPX could turn back lower fairly directly; conversely, if B/2 is going to become complex, then it may rally toward the higher black trendline of the upsloping black trend channel (second B/2 label).

Beyond that, no change.  Trade safe.

Monday, June 29, 2020

SPX and INDU Updates: Interesting Market Reactions to Legacy Trendlines

Nothing much to add since last update, but I didn't want to call attention to some old trend lines on the long-term INDU chart, because the market has reacted to them:

Bears have continued to push their position in SPX so far.  SPX bulls could always still have some tricks up their sleeves, but the levels they would need to sustain breakouts over appear to be reasonably clear:

In conclusion, I'm still presuming that A/1 down is complete with C/3 down still due -- the main lingering question is whether B/2 is complete or will become more complex.  Bulls would need to start clearing near-term resistance to get anything going, but if they do, then bears might want to be cautious.  If they can't, then bulls should probably stay cautious, as C/3 down could be underway.  Trade safe.

Friday, June 26, 2020

Late SPX Update: So Far, So Good

My apologies for the late update today.  I had to travel yesterday for a minor dental surgery, and could not get enough rest to get up in time for an earlier update (I barely woke up at 3:25 a.m., just enough time to get to my screen before the cash open!).  I think that technically I'm still supposed to be in bed (they tell you to get rest afterwards, and I didn't get much, so...)

In any case, the presumed B/2 high has held, and that led to a solid sell-off.  Note the break of the red trend line was followed by a back-test of that trend line, which was solidly rejected this morning.  It will be interesting to see if bulls can muster another test of that line, but if they can, then I personally would probably treat it as another sell op (not trading advice):

In conclusion, so far, the presumed B/2 high has held.  Bears will have to be at least a little cautious as we are now retesting the A/1 low, and B/2 can always become more complex if it wants.  Beyond that, assuming that the larger degree red (2) count is correct, current targets are listed on the chart.  Trade safe.

Wednesday, June 24, 2020

SPX Update: Second Verse, Same as the First

SPX has remained stuck in a sideways grind, so still no material change:

In conclusion, the market has gone nowhere for a week, so there's been no new information and no change in that time.  Trade safe.

Monday, June 22, 2020

SPX Update: No Material Change

Still no change to the bigger picture.

At lower degree, it's not clear whether (the presumed) 2/B is complete or not, due to the last high not being clean:

Beyond that, still nothing to add, as SPX has been stuck in a noise zone for a week now.  Trade safe.

Friday, June 19, 2020

SPX: A Dull Market

The market has done nothing since last update, so there's literally nothing to add.  If this is B/2, it can run a bit higher without creating any issues, if it wants.

In conclusion, literally nothing has happened since last update, so there's just nothing to add.  Please reread that update if need be.  Trade safe.

Wednesday, June 17, 2020

SPX Update: Short and Sweet

Since last update, the Fed decided it couldn't stand to see even a small (relatively-speaking) correction, and stepped in to announce that it would henceforth be buying anything and everything, including (but not limited to):  Bubble gum, used toiletries, and recycling (cans and glass bottles ONLY -- even the Fed has to have standards!).

Some people say this is a bad thing, but I, for one, am looking forward to the rise of Fed Recycling Centers, where you will be able to exchange a bag of aluminum cans for eleven trillion dollars.

This announcement came in the middle of what is currently presumed to be a second (or B-wave) bounce.  As we discussed in the prior update, there appeared to have been five waves down, which marks a potentially-complete structure -- and thus often (but not always) leads to a counter-trend move.

That said, the Fed always makes bears a little nervous, and with good reason:  They can and do sometimes "mess with" the apparent wave structures.  The Fed represents something of an anomaly, in that when they add massive amounts of liquidity, they are coming in from OUTSIDE the previous structure, and thus not necessarily subject to the normal rules of the structure.

Accordingly, I've written "with caveats" on the chart.

In conclusion, normally, we'd be reasonably confident in another leg down, but due to the Fed intervention, we'll trade what we see, but cautiously, particularly if the market moves much above the red (1) high.  Trade safe.

Monday, June 15, 2020

COMPQ and SPX: Big Warning Flags for Bulls

There's an ancient Chinese curse that roughly translates to: "May you live in interesting times," and 2020 has indeed been "interesting times."

So far, we've had (among other things) a global pandemic, a market crash, and massive civil unrest.

Inside the course of only one week, our media "shepherds" went from shaming small groups of people who were breaking lockdowns because they wanted to feed their families, to cheering massive groups of people who were breaking lockdowns.

As I've written previously, one of America's struggles right now is that we (as a society) have no widely-trusted sources of information (See: Sunday Thoughts: Coronavirus is NOT America's Biggest Problem).  And that situation has deteriorated even further in the three months that have passed since I penned that piece.  Because through this alternate shaming and cheering (and now back to shaming), by any objective measure, the media has finally destroyed what remained of their credibility, and the American people are not so stupid that this egregious and glaring double-standard has been lost on them.

At least, I trust they're not.

Further, we are stuck with a corrupt media that seems intent on creating even more unrest, if it can.  Some might say, "Oh, it's not the media's fault, they're just reporting things as they occur!"  No, they're not.  They report what they want, and they ignore what they want.  Some of this is our fault:  We seem to have an appetite for destruction, so "if it bleeds, it leads," because that gets eyeballs and sells advertising.

Anyway, I have so, so much I want to say about all this, but I'm still holding back.  I don't think people are ready to have the discussions we need to have as a nation, and frankly, I fear we may NEVER be ready to have those discussions.  We have put ourselves in an awful position.

So let's look at some charts.

First up, in the distant past, I've discussed that volatility can act to compress time (a highly volatile market can accomplish in a day what might normally take several weeks).  I mention that because normally I would not consider the alternate count I'm about to present, but because of the extreme volatility of the past few months, it is at least on the table as a potential:

Same deal for SPX:

In conclusion, back on Wednesday, I noted that we had a small impulsive decline down from 3233, though there was some question whether it was wave C of an expanded flat, the break of Tuesday's low kicked that off that table.  The first impulse has since gone on to form an even larger impulse, and that suggests a trend change at the corresponding degree.  Most likely, this is wave (2) down of the larger 5 up, but because of the distance run by the rally from the March low, it's not impossible for that to be all she wrote.  We'll see how it plays from here.  Trade safe.