SPX and COMPQ: Inflecting at the Inflection

So, courtesy of Super El Nino (which sounds like a low budget comic book hero from south of the border: "¡Mira! Up in the sky!  It's a pájaro, it's an avion... it's Super El Nino!"), we have yet another hurricane expected to wreak havoc on us this weekend.  This will be the fourth named storm to impact us since mid-August.  My instinct is -- despite the projections that Hurricane Nolo will become a category 3 "major" hurricane -- that this one will not hit us quite as bad as Hurricane Lala did... but I wanted to mention it just in case I'm wrong and Hawaii disappears beneath the Pacific and there's no update on Monday.

It's actually kind of amazing that we've been hit by two "L-named" storms, an "M" storm, and now an "N" -- at this rate, by the time we reach the end of the alphabet, I'll be hunting boar with spears and posting updates using smoke signals.  Just fair warning.

Since last update, SPX found resistance and declined.  As I wrote on Monday:

[A]s SPX moves higher (and thus closer to resistance), bulls will want to gain more caution, not less -- since as yet we cannot "rule out" the more bearish options (such as a b-wave low).

For the moment, this decline leaves the market range-bound in a sort of no man's land:

COMPQ reversed right at the black B-label but I want to caution that this reversal does not yet confirm said b-wave, and another high is not at all off the table yet.  My eye tends to locate inflection points by reflex and I usually stick the labels there -- so the market reacting to the inflection doesn't immediately prove that the label's right (it just proves that I accurately identified the likely inflection point).

In conclusion, I've given a lot of warnings in this update about "this could still be something else," and it could -- but of course, on the flip side, this move is exactly what bears would want to see, so we'll find out soon enough if they can keep pushing or not.  Trade safe. 

 

SPX and COMPQ: COMPQ Confirms Read from August 26

COMPQ finally confirmed the micro b-wave high (from August 26) and WXY count from September 9.  I would like it noted in the Official Record that on August 26, our house was running on a portable generator and my mobile hotspot wasn't working right... so while it was not the hardest call I've ever published, it was -- hands down -- the least convenient.

SPX has been stuck in neutral since Monday's update, so just a new melt up trendline and not much new to say about it:

In conclusion, COMPQ now needs to decide if the July low was a b-wave that needs to be cleaned up or not.  At this point -- due to the larger pattern -- if it does decline to that zone, it would most likely just be a scary correction and probably not the end of the bull market. Trade safe.

SPX and COMPQ Updates

There are no real changes since Friday's update, since SPX has continued to bounce off the blue trend line.  Worth mentioning that even though everything is so far performing in line with a WXY, as SPX moves higher (and thus closer to resistance), bulls will want to gain more caution, not less -- since as yet we cannot "rule out" the more bearish options (such as a b-wave low).

COMPQ is closing in on the upside zone that I mentioned on Friday:

Not much to add beyond that.  Do keep in mind what I mentioned not too long ago: even if SPX makes a new all-time-high (which it would if the WXY count is true), the possibility exists for that high to be micro wave 5 to the rally off the July low, which (if that were to be the case) would be followed by a potentially-larger correction.  So, while sometimes new all-time highs can, of themselves, signal an "all clear" for bulls -- this is not one of those cases.  Doesn't mean the rally can't continue, just means that from a technical standpoint here, a new high would not be enough by itself.  Trade safe.

SPX and COMPQ: Trendlines and Powerlines

So after 4 weeks and 5 figures, we finally have power and internet again.  Hurrah.  There's a long and convoluted story there if anyone ever wants to hear it -- but either way, years from now, when some news report mentions that "after Hurricane Lala, some people in Hawaii were without power for a month!" you can say, "Yeah, I know one of them."

Since last update, the value of the SPX trend line chart proved itself again:

COMPQ held above its key zone as well:

In conclusion, the WXY I've talked about for a while remains very much on the table for now.  In the event bears were to sustain breakdowns at support, though, then bulls should become very cautious.  Trade safe.

SPX and COMPQ: Warshing the Fed

So today is a Fed day (there are probably now at least 40 updates that begin with those exact words), and it's interesting to note that the pattern has turned bi-modal right on schedule.  We can see this on the SPX chart below:

COMPQ is also attempting to dissolve my prior reticence about the black B-wave being complete.  It's not entirely there yet, but it's approaching the edge:

I think the biggest issue for bulls here is that the COMPQ count, if it's correct, wants to pull COMPQ lower one way or another.  Five weeks ago, when I first published that count, it seemed almost ridiculous in light of the strong up-move we were (then) right in the midst of... but now that the market has burned off all its prior upward momentum, it's a lot easier to countenance.

So I think the takeaway here is that bulls should be watching their backs pretty carefully right now.  I can't go so far as to say it's a lock for bears... but this market's ice is thin.  Trade safe.

SPX Update: Below Resistance, Above Support (for now)

Today's update is being published early because I'm too exhausted to stay up any later.  I've been dealing with electricians and utility companies and general house-related disasters all weekend and am running on fumes right now.  On the bright side, there does finally seem to be light at the end of the tunnel.  Hopefully it's not an oncoming train.

Last update said:

[T]he first resistance line is black, so bulls will need to sustain trade above that to prove their mettle.  Conversely, bears will need to sustain trade beneath the falling blue trend line to prove theirs.

SPX then rallied up to black and got rejected, so bulls haven't proven their case yet:

The chart pretty well explains the situation, so probably no need to rehash that here.  Trade safe.

SPX Update: The Value of Proper Trend Lines

 In the last update, I wrote:

While it's fun to speculate, in reality, this remains a situation with multiple complex options, including WXYs and potential expanded flats at two different wave degrees.  In such situations, I prefer to focus on trend lines and just let the market show us which route it's decided on.

The following chart was then attached:

SPX fell through black straight down to the blue horizontal.  And as of the time of this writing, ES futures are indicating a big bounce off the blue horizontal, effectively demonstrating the value of this approach.  Note the WXY is a corrective pattern that preserves the larger uptrend -- but the first resistance line is black, so bulls will need to sustain trade above that to prove their mettle.  Conversely, bears will need to sustain trade beneath the falling blue trend line to prove theirs.  Not much else to add beyond that.  Trade safe.