Monday, November 24, 2014

SPX, BKX, IBM, and GOLD: Create Your Own Title Day!

Today is the much-anticipated Create Your Own Title Day! during which readers have the chance to create their own succinct yet attention-grabbing article title, since I'm drawing nothing but blanks.  Good luck!

No material change since Friday's update, despite hours of staring at charts and gnawing on Twizzlers.  Friday's wave (iii) target was 2070-2075, and SPX hit 2071.46 and reversed by 15 points.  Much as I dislike this market, it has been capturing and reacting to target zones for weeks.  We probably have to presume this is wave (iv) until proven otherwise, but the chart below talks about the zone where bulls might start to get cautious, which equates to roughly 2053:

There are a few markets that would really look better with new highs:  RUT is one such market (not shown), NYA is another and has gotten very close (also not shown), and BKX is another (shown below).

Perhaps ironically, at this point I think bears want to see those highs reached sooner rather than later.  I don't think bears want to see a deep correction this late in the game, because that would imply the rally to this point was only a massive first wave, with a huge third wave rally to follow.  That's not my preferred count, as I noted previously when I wrote:  In the bigger picture, I suspect what we've been seeing is too strong to be only a first wave, and thus suspect we're currently unwinding ALL OF wave 5 in one relentless bear-crushing wave.  

Anyway, I accidentally clicked into the wrong chart-book as I was working last night, and ended up in a chart-book from 2012-2013.  This was interesting (note the bottom annotation from 1/8/13).  The BKX chart below hasn't been updated since 2013, so I brought it into the present since it's relevant to the above discussion.

Another interesting chart I stumbled across was IBM.  I first began leaning intermediate bearish on IBM back in September 2012.  I later published a couple updates on it in 2013, reaffirming my bearish stance, but it's been such a slow grind for so long that there was nothing terribly interesting to add after those updates.  I'm bringing it forward now because it's a great example of extended sideways/down topping action, and there are a few things traders can learn from this chart:

Finally, at the request of a reader, I'm going to update a chart that I haven't updated in a year and a half:  Gold.  I haven't updated this chart because there hasn't really been any need to.  Gold did finally capture my target from April 2013, so I guess it's worth updating in honor of that fact.  I added the green channel and some new notes:

In conclusion (for SPX) bulls will want to be cautious in the event of a sustained whipsaw at the red trend line as noted on the first chart.  And, as a bonus for readers who read the article (as opposed to just looking at the charts):  I actually think 2049-52 is probably the key support zone for SPX right now.  Markets sometimes get whippy near important support/resistance and see-saw around it to drive everyone batty, so we'll see how it plays.  Beyond that, bears should probably keep their fingers crossed that the rally continues more or less as it has until BKX, RUT, and NYA make new highs.  Trade safe.

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