Monday, April 18, 2016

SPX and RUT Updates

Last update expected that over the near-term, another small leg down was expected, with Target 2 being 2077.  SPX captured that target (low 2076.31), but left itself options for additional downside.  The question is whether any pending additional downside will simply become a fourth wave at micro degree:

Since the current wave structure is about as clear as mud filled with resin and covered in tar, I've drawn up a simple near-term support and resistance chart:

Bigger picture, RUT is testing its 200 day moving average, and its intermediate downtrend line:

The biggest concern I have for bears is the stair-step pattern that RUT just went through.  There's still a shot that pattern is a terminal, but it could instead be a coiling pattern.  We won't know for certain until it moves a bit farther, but just be aware that if it's a coiling pattern, a breakout could take aim at the 1194-1206 zone.

In conclusion, this remains a difficult market to chart, and frankly, it's always something of a drag dealing with these waves that seem driven more by central banks than by actual humans.  (Not that I'm suggesting for one minute that central bankers aren't human -- wait, scratch that.)  Thus far, the small handful of semi-promising bear moves have each ultimately stalled at three waves down, and then culminated in new highs -- so at this point, it gets difficult to say anything other than, "Well, it's still an uptrend!"  As noted, though RUT is testing intermediate resistance.  On SPX, the first semi-meaningful zone for bears to claim in 2060.  Trade safe. 

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