Monday, September 14, 2015

SPX, NYA, NDX: No Material Change

Nothing much has happened since last update, but I've added a couple charts to help explain why I'm slightly more inclined to favor a complex correction (as outlined last update).  Let's start with NDX:

Below is a look at the preferred count in SPX:

I'm continuing to discount the immediate bull option, so I've moved it onto its own chart for now:

NYA contains additional details regarding the preferred count:

In conclusion, there's no material change since last update, and the near-term bear options remain preferred unless bulls can sustain a breakout over 1994.  The pattern in NDX and RUT (not shown) may be providing fair warning to bears to protect profits in the event we head lower over the near-term, though.

If I were the market, and wanted to punish the greatest number of players, I would know that the toughest pattern for bears to trade would be a true expanded flat that breaks the 1867 print low before whipsawing back up to break 1994 -- because a breakdown at 1867 would at least open up the potential of a third wave decline, so there would be no way to know for sure that the market wasn't about to collapse again.  Thus, in the event 1867 fails, I would then watch for small impulsive rallies as a potential warning of a coming larger c-wave. 

Do note that expanded flat b-waves (the presumed current wave of the preferred count) are some of the toughest and most prediction-resistant waves on the planet.  A b-wave is allowed to retest the low without breaking it, or break the low and whipsaw.  Accordingly, we'll simply have to track it as it unfolds, assuming, of course, that 1994 continues to contain any rallies.  Trade safe.

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