Wednesday, June 3, 2015
SPX Update: The Best Intermediate Trade
Since last update, SPX has continued grinding sideways within the zone represented by the red circle, as originally discussed on May 19. The near-term pattern has the appearance of an expanded flat, and hints that the current consolidation/rally might end up being sold to new lows below 2099 -- we'll take a closer look at that on the near-term chart.
First, the daily chart:
The near-term chart shows the potential expanded flat. This is, of course, not the only potential, it's simply the one that jumps out as a slight odds-on favorite:
Finally, the diagonal we've been discussing remains on the table for now. Note that the expanded flat shown above could form the ABC to complete wave (iv), but because the the pattern of the past few months (actually, virtually the entire year so far) is a bit unclear, we can't bank on much of anything right now, and things could be more bullish or more bearish than shown.
In conclusion, the near-term pattern hints that 2099 is only a short-term low. The intermediate pattern still hints at a terminal phase, but is so incredibly noisy that claiming high-confidence about having it "all figured out" would run a bit too arrogant for my tastes. All we can do for now is try to position for the near-term and adjust on the fly as needed -- and that's pretty much the only approach that's worked all throughout 2015 anyway; every other approach has been whipsawed to death multiple times. So for the moment, I think the best intermediate trade continues to be: Long humility, short arrogance. Trade safe.
Posted by PretzelLogic at 2:33 AM