Monday, March 14, 2016

SPX, NYA, BKX: 75-Year SPX Chart Reveals a Unique Weekly Fractal

In recent updates, we've focused primarily on the short-term waves, so today we're going to take a more detailed look at the big picture (and in the case of one chart, the REALLY big picture).  We'll also examine a few near-term patterns that might help as signposts along the way.

Let's start with a long-term historical chart that examines the current wave from a fractal standpoint.  The chart below "only" shows the prior 75 years of SPX, but I did examine SPX's patterns going back to its inception -- and the thing that jumps out is how unique the current pattern is on the weekly chart.  I find this somewhat intriguing, because it's pretty rare that you can't find a nearly-exact match for any given fractal in your historical charts (or, as the New Gangsta English Version (NGE) of Ecclesiastes says: "There ain't nothing new under the sun, yo.").

(This chart is 2000 pixels across -- to view at full size, right click and select "Open in New Window," then click the chart again.  That's what you do if you're using Windows, anyway.  If you're browsing from a Mac, I have no idea what you do, but it probably involves arbitrarily suing Apple over something.)

Now that we've established that the current move is somewhat unique, let's take a look at bull options for the current wave, because folks have been asking for 'em.  It's worth noting, though, that SPX is finally challenging a more important resistance zone than it has faced thus far.  Along those lines, also note that the more immediately bearish count is not detailed on the chart below (since it's been covered in detail previously), but is simply mentioned in the blue call-out box:

NYA is also challenging more significant resistance, and has effectively reached the third resistance zone that I spoke about in February:

Stepping away from the big picture, BKX did not make a new high on Friday, and may provide some additional clues heading forward:

Zooming out a little on BKX, we see why the next move in this pattern may afford some predictive power in its wake:

In conclusion, if you've found this market at all challenging lately, then buck up!  Nobody has ever faced a weekly fractal exactly like the one we've been dealing with -- so "challenging" is par for this particular course.  On Friday, I mentioned the area around 2022 as potential resistance on a breakout, and SPX closed right at 2022 -- today we'll find out if this area is going to indeed offer any resistance.  NYA is also challenging its down-sloping trend line.

On the bull side of the coin, to this point, resistance levels have proved to be only short-term challenges.  Nevertheless, the current levels, and the zone just north of here, are potentially a more significant degree of resistance than the rally has faced so far, and thus should be a more significant test of the rally's true strength, or lack thereof.  Trade safe.

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