Monday, May 11, 2015

SPX and INDU: Market Still 'Home on the Range'

I'm just going to come out and say that I'm getting rather tired of this trading range.  Charting it has grown increasingly more difficult over the past few weeks, and until there's a sustained breakout or breakdown, there really isn't anything substantial to add.  We can speculate on what comes next until we're blue in the face, but simply recognizing the range for what it is, and trading accordingly, has been more valuable of late.

I think both bulls and bears are starting to feel like the confused shopper in the photo below, and growing a bit impatient waiting for the checkout line to move:

The chart below (again) shows why everyone is feeling that way: 

Obviously, there's still no change to the intermediate picture (let's just hope we're all still sane when there finally is):

Near-term, INDU looks like it may be working on a complex flat.  I'm hesitant to get too married to this, because the pattern has already put together a series of several unusual waves, so there may be more coming before it's all said and done -- but this is my best guess at the moment.  Note that wave (B) does not have a true invalidation level. 

Beyond that, I'm not going to update any particular wave count at this juncture, because the options are presently bordering on infinite.  It's been a long time since I've seen the market so noncommittal -- so I think it's more valuable to simply continue to recognize the trading range for what it is right now, and to simply remain focussed on the present until things clarify again:

In conclusion, in the event the market can sustain a breakout over the noted resistance zones, then we'll have to respect that breakout for as long as it lasts -- but do keep in mind that INDU is currently hinting that the range may still have more down/up frustrations planned.  The caveat to that is the same as I've continued warning for the past several weeks:  the more often we traverse this range, the less reliable the patterns become.  Right now, the reality is that almost every wave (up and down) looks corrective -- so this pattern has kept its options open and thus left us waiting for the next key level break, which will allow us to at least begin definitively eliminating what the pattern is NOT.  Until then, trade safe.

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