Monday, October 31, 2016

SPX, NYA, RUT Updates: Global Title Shortage Begins Impacting Updates

Prior to today, I'd had a decent collection of reserve titles stored in a fire-safe in my basement -- but today I realized that I don't HAVE a basement, leaving this update without a suitable title.

On Friday, SPX captured the "higher probability" target from October 26, and has so far managed to hold 2114.  I'm going to let the charts take it from here, starting with RUT, which hasn't been playing along with the Chop Zone that SPX has been stuck in:

Next is NYA:

The bigger picture view for SPX is still unchanged: (continued, next page)

Short-term SPX below:

In conclusion, things seem reasonably straightforward here:  If bears can force a sustained breakdown at 2114, then we probably have to assume a bear nest until proven otherwise.  That would mean that bears let their positions ride unless there's a decent whipsaw -- the tendency after a chop zone is to close positions too early after a breakdown, since we've become conditioned to expect more chop.  Thus, if there were to be a breakdown, just remember to forget (yes, "remember to forget") about the prior chop unless the market gives you reason not to.  If there's no breakdown at 2114, then we expect a rally to at least 2155, likely higher.

As a side note, Happy Halloween to all my readers, particularly those who have younger kids, as I do.  Trick-or-treat (and trade) safe!

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