Monday's update noted: "Odds favor a continued run higher, with 1510 as the next near-term target." On Tuesday, the SPX came within pennies of 1510, and is now within spitting distance of my next target zone of 1520-1530.
Wednesday should be an interesting session, since it's FOMC rate announcement day, which sometimes makes for a volatile market, though the trend of the past 4 years has been for an up-day. Of the past 33 rate announcement days, SPX has closed higher on exactly two-thirds (22) of those days. Bespoke Investment Group reports that since the beginning of ZIRP (12/16/08, the last rate cut), the S&P 500 has averaged gains of .66% on FOMC announcement days.
1500 is now the first meaningful support zone to watch. The last wave, which chopped around beneath the 1503 level, could be a running triangle fourth wave, but the structure was ambiguous enough to leave more bullish options on the table. The count shown in blue on the 3-minute chart below represents the conservative running triangle option; the alternate count in black notes the more bullish option.
Note we may be entering a near-term chop zone, represented by blue wave (4).
The SPX hourly chart continues to show a trending market. We're currently sitting on 50+ points of profit for January, which has been fairly "easy money" (virtually no draw-down) so far, so be sure to continue protecting it -- especially since we've reached the 1510 target and are now approaching my third intermediate target zone. If that zone represents all of blue wave 3, then we will soon enter a higher-degree and longer-duration chop zone in blue wave 4.
In conclusion, this remains the type of market for which the phrase "the trend is your friend" was coined. There are no signs of a turn yet, but the preferred wave count suggests that we may be approaching an intermediate chop zone -- once blue wave 3 completes, the market can be expected to enter a fourth wave chop zone of several weeks duration.
I've also been working on some long-term charts to help locate the market's "you are here" position within the much bigger picture, so keep an eye out for those charts to be released over the next few updates. In the meantime: trade safe.