In the update of January 21, I mentioned that downside targets had been captured, and so, accordingly, I was in watch and wait mode until the market declared its next intention. Since that update, the market has gone essentially nowhere, and we've been stuck in a chop zone for the past week.
Accordingly, there's still no material change, but I do have an interesting weekly chart that suggests that today may be a "now or never" day for bulls:
Thursday's session was a bit choppy, but I've already got the SPX chart all figured out and labeled (below)!
It was pretty simple, really. As we can see on the SPX 1-minute chart below, yesterday's price action was actually caused by an earthquake off the coast of northern Sumatra:
The five-minute chart helps remove some of the noise from the 1-minute chart shown above, but still reveals that we're stuck in a chop zone. No real change here, either, except to note that whichever way the chop zone breaks, there's some suggestion that such a break would signal a small third wave in progress (meaning the move could run in the direction of the break) -- thus bulls should probably be cautious if there's a sustained breakdown at 1872 first, and the lower blue line second, while bears should be cautious if we sustain a breakout over 1920ish.
In conclusion, today may be a do-or-die session for bulls' near-term hopes. The market is trying to build a base here, but still needs a sustained breakout for the base building attempt to end up successful. Trade safe.
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