Monday, August 10, 2015

SPX, INDU, NDX: No Suprises Today

Friday's update warned that it was time for bears to be cautious, and, indeed, it appears we'll have a significantly higher open this morning.

Keep in mind that we're still inside the Great Noise Zone of 2015, so there are a lot of near-term options inside this range.  The preferred option of the past few weeks probably has to continue to be given at least slight preference, and that's for a textbook "double retrace" that will now head back toward 2115 SPX:

Worth noting that the market reached a perfect 1.618 extension of the proposed wave A, which is often where a C-wave will bottom:

Keep in mind that if we are now currently in a C wave rally, as shown by the bull count on the first chart, then it will likely be fairly relentless for a while.  It's wise to wait until the target zone is reached, and/or we begin seeing impulsive declines before trying to go against it for more than a scalp.  And frankly, even scalping will be difficult against the trend on a C-wave.

This next chart is a bit ahead of the curve, and isn't relevant if we're in a second wave (as shown in the bear count).  But if we do indeed test/break the 2115 zone, then one option for an extremely complex pattern opens up -- as is shown below via INDU:

Finally, NDX also hints at the possibility of a C-wave rally.  The bear count here is the same: for a second wave, that could end roughly where shown by the label:

In conclusion, the intermediate picture remains bearish, but the near-term picture is a bit up for grabs at the moment.  If we get back to 2115+, then, the closer we get to the all-time-high, the more actionable it becomes (not trading advice!).  If we start to see impulsive declines from the bear 2 zone, then we might consider the possibility that the picture is even more bearish than shown.

Last update, I briefly covered the bull option, via INDU -- that option remains wholly viable, of course, so it's wise for bears to continue with a cautious approach; in the event that we reclaim the all-time high, then we'll have to give the bulls a bit more airtime.  Trade safe.

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