Wednesday, October 15, 2014

SPX and COMPQ Capture First Intermediate Targets -- What Next?

A few interesting things have happened since Monday's update:

1.  SPX captured its first intermediate target zone (1885-1891).

2.  COMPQ captured its first intermediate target zone (4200 +/-)

3.  The near-term bullish (still intermediate bearish) B-wave option is effectively off the table.

Before going further, I'd also like to refer back to a couple important paragraphs from Monday's update, because these remain important with the market in its current position:

As I wrote a couple weeks ago, though, do keep in mind that "there's no such thing as support in a bear market" (see 9/24 annotation) -- so if the market has entered a bear phase, then support zones will mean much less than they did during the bull phase, and will end up functioning primarily as bull traps.

The 2-hour chart notes that, here again, this market has reached a potential support zone.  This is tricky here for bulls, though, because third waves are very unforgiving to counter-trend trading.  If the market has already entered blue (3)/C, then every bounce along the way is going to be sold to new lows and there will be no second chances to exit longs for profit.  So unless one wishes to end up becoming a "long-term buy-and-hold investor" at SPX 1900ish, I would suggest staying very nimble with any long positions.  The trend is down at the moment, thus the lion's share of intermediate profits will likely come from selling the bounces, not buying the dips.

Beyond that, I'm going to keep things fairly simple for today's update.

We'll start with COMPQ -- but before looking at the current chart, let's take a quick look at the COMPQ chart I drew on September 29.  From time-to-time I post things like this, because I've occasionally heard people grumble that Elliott Wave is a bunch of malarkey and there's no way it can work and besides, the market's unpredictable, and you can't pick tops or bottoms or time the market, and blahblahblah blah.  Plus:  blah!

So, in response, here was the only Elliott Wave count I posted for COMPQ, complete with projections, all the way back on August 29.  If anyone wants to insist this was pure random dumb blind luck, and that Elliott Wave doesn't work (especially considering that the wave counts were not bearish in the months heading into the top; even the first line on the chart goes up to V), then my only reply is this:  Get your own column.

Below is the current COMPQ chart.  As noted, the B-wave was slightly time-compressed verses how I drew it above, yet it peaked in the expected price zone.  For reference, I rarely do time projections -- I generally just do price, and then try to utilize the chart space so that the projections are easy to follow.

At this point, we do have to stick an "alt: C" on there, in honor of the fact that COMPQ has reached its A=C target zone -- but currently, there's nothing to indicate the bottom of C has arrived, and the preferred count remains pointed toward 4090-4110, with potential for even lower prices.  

SPX's 2-hour chart is below.  SPX has dropped through the gray base channel as anticipated, and has remained within the blue crash channel.  Bears shouldn't really consider anything other than sticking to "short and hold" mode as long as that blue channel remains intact.  This is what they've been waiting for, after all.

I drew the 2-minute chart yesterday, when future were still trading roughly flat, and thus I discussed an alternate near-term count.  As of the time of publication, that count is looking like it's become an even "less than alternate" count, and assuming the futures decline sticks through the open, the black alternate ABC count may be able to be ruled out within seconds of the cash open.

The preferred near-term count is that the market has been coiling, and is about to finally see the breakaway-type decline that has been conspicuously absent to this point.

NOTE:  Typo -- 1940-51 should be 1840-51.

In conclusion, the intermediate preferred count remains bearish, as it has since September 24, and the near-term preferred count is presently bearish.  Bears have no reason for any anxiety whatsoever as long as SPX remains within its crash channel.  Trade safe.

1 comment:

  1. In your 10/15 note at the bottom of your 2min spx, you mean 1840-51, right?