Last update expected the market was in the throes of a fourth wave, with the potential for another wave up. Friday's session had the appearance, and the frustrating feel, of a triangle. Most likely this was a triangle B-wave for wave B of 4. The nice thing about triangles is that they almost always appear as the penultimate (second to last) wave in a structure. In other words, when you see a triangle, you should get ready for the thrust out of the triangle to be the end of a larger wave form, meaning it will ultimately reverse.
I've prepared a lot of charts for the weekend, so let's get right to them. Let's start with the SPX 2-minute chart and build from there:
No change to the SPX 30-minute chart:
And the SPX 2-hour chart. Note the uptrend from the October lows has broken, and that this was a three-point validated trend line, which means that unless bulls can reclaim it directly, this break has the potential to be significant and meaningful:
Next, let's take a look at INDU in detail (continued, next page)
On the chart below, I cannot yet rule out the ending diagonal (shown by the black path), but I'm more inclined to think we follow the blue path. That's subject to change based on real-time feedback from the market, of course -- for example, if INDU can sustain trade north of its near-term resistance levels (see next charts):
Let's take a look at the bull/bear counts in detail breaking each of the two counts shown above into more detail. We'll start with the bull count (black path on the chart above):
The bear count is showing the most conservative option of a subdividing wave (blue "or (1)/or (2)"). Frankly, if this is the bear count, it's entirely possible it will continue south of 17037 directly after the current rally completes, with little else in the way of pauses.
Finally, INDU's 30-minute trend line chart:
In conclusion, a number of the other markets I track are right on the cusp of giving significant bearish signals -- BUT, to be fair, they're not quite there yet. Based on SPX and the apparent triangle, I'm still inclined to think this is a fourth wave, and thus that the odds favor a trip to the next target zone. Beyond that, I'd like to see how certain other indices react here before committing fully to the bear case -- but my current inclination is that the decline probably has considerable downside still remaining. Just be aware that I'm front-running the market with that statement, and the next few sessions should help confirm or deny the bear thesis. Trade safe.