Monday, July 28, 2014

NYA, RUT, COMPQ, SPX, INDU: What the Bears Still Need, and Targets for the Expanded Flat

Last update noted the expanded flat appeared probable, and, thankfully, the market never deviated substantially from that road map, thus freeing me to spend the rest of the week on highly productive activities, such as helping my sons build gigantic houses in Minecraft.  If you've never played Minecraft, then I suggest steering clear of it, because it's one of those games that's capable of sucking away entire days of your life and leaving you with only a bunch of "virtual productivity" to show for it.  You can build an entire house out of gold and diamond bricks in Minecraft -- yet few, if any, of your creditors will be impressed by that accomplishment.  Nor will your spouse.  BUT: your kids will love you for it... which is how I got suckered in.

Anyway, there are lots of charts to cover today, so I'd better quit yammering and get to it.  Since this week will possibly (also) be a light publication schedule, I've done a number of extra charts to hold everyone over.  First off is the trusty NYA:

Next is COMPQ, which managed to peak less than 50 cents away from the key overlap, thus providing an entry for even the most risk-averse traders out there:

Next is RUT, which appears so incredibly straightforward that it almost makes me uncomfortable.


Finally, SPX, which bounced a week ago from the support zone I'd noted, then managed to rally up to new highs, thus seeming to validate the expanded flat.

A closer look at SPX reveals that the decline, so far, is only three waves.  Bears can probably feel a bit more confident after a new low, which would complete an impulsive decline.  There aren't any magic bullets in trading, but impulse waves are the closest the market comes to "confirming" trend changes.  The obvious count here is for a 4th wave triangle.  Since the bulls have surprised so often in this market, I'm now always wary of the obvious bear counts.

In conclusion, the expanded flat count continues to appear solid.  Assuming a new low is forthcoming, then that will be as good as it get for confirmation that C-down has begun, and my minimum target is the 1940's for SPX.  For reference sake, the textbook target for an expanded flat would be 1938-39.  And now the flip side of this coin is that the target areas could represent the next major turn, and lead the market back to new highs.  INDU and RUT are hinting that there could be other potentials, though, so I may pop in later this week with another update as things unfold.   

Oh, and also please note there's a "Donate" button on the upper right side of the blog -- that button helps generate new updates if it's clicked on a few times (of course, I'm assuming the link still works; it's been an awfully slow year for this...!).  Sorry to mention it, but let's face it:  Short of that, I'm being just as productive playing Minecraft with my sons (probably moreso, since that's family time).  Thank you (again) to my very small handful of regular supporters (you know who you are!).

Have a great week, and trade safe. 

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