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Friday, February 17, 2017

SPX Update -- and Another Chart Worth Watching


SPX is getting closer to the 2400 target, but may take a breather here.  On the intermediate-term chart, we can see SPX just broke above its trend channel, so this may lead to a rubber-band snap-back to at least test the channel from above.  If it falls back in and fails to reclaim it, then bears may get a larger reprieve, but right now, this is looking like a fourth wave correction (see 1-minute chart).

Below is the 2-hour SPX chart:


On the 1-minute chart, we can see the potential for some fourth wave shenanigans:


I also found the following chart interesting.  This is the NFIB small business optimism index, and it spiked enormously on Trump's election.  If this breakout sticks, it could translate into a positive impact on the real economy (remember the real economy?  I think it's still out there somewhere, buried underneath a printing press and a bunch of Bernanke's beard clippings.)




Below is a breakdown with more detailed numbers:


So small businesses are more optimistic than they've been at any point over the past 12 years, and the 38% jump in businesses who "expect the economy to improve" under Trump (vs. how they felt in August under Obama/Clinton) is quite significant.  Just as for individuals, positive expectations among businesses can become a self-fulfilling prophecy.

In conclusion, SPX may be due for a breather, but thus far the bigger picture still remains bullish for now.   Traders who are wondering where fuel and sentiment for a continued intermediate rally could come from might take note of the NFIB survey.  Trade safe.

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