Monday, February 2, 2015
SPX and INDU Updates
Last update expected lower prices over the near term, and the market obliged. There were two near-term wave counts shown for INDU, and INDU closed right on Friday's target for the more conservative of the two counts, at the blue (B)/2 label. This is the moment of truth, and if INDU sustains a breakdown at 17136, then we'll have confirmation of at least a fifth wave decline underway.
Building the next larger wave degree from the current near-term pattern, if INDU breaks 17136 immediately, then we can probably expect a test or breach of the 200 DMA:
An additional INDU one-minute chart contains some further discussion on the pattern:
No change to the SPX counts:
And a more basic support/resistance chart on SPX:
In conclusion, on an intermediate basis, there's no change from Friday's update (or the updates of the past few months, for that matter). Basis near-term, a breakdown here would need to be respected as holding at least considerable bearish potential energy, and I would not look for an immediate bottom in that event, but expect at least some degree of follow-through.
On a near-term basis, on Friday, the market was expected to decline to test the recent lows at the minimum, and that's what happened -- so now we've hit the first inflection point, and there's simply not much more to be done in the way of analysis until the market declares its next intention. Trade safe.
Posted by PretzelLogic at 4:30 AM