Friday, March 31, 2017

SPX and BKX: Bull Count vs. Bear Count

Last update discussed the possibility that wave 4 was completed, but also discussed the potential problem regarding the appearance of a corrective low (b-wave low).  Today I've annotated a few additional charts to give traders some signals to note and signs to watch for -- and I'm going to let the charts take it from here.

Let's start with the SPX 1-minute chart, which contains discussion about several details:

Bigger picture, nothing to add:

BKX kept us looking lower right up through Monday, but there's no crystal clear outlook here just yet (one could, of course, simply subscribe to the bull interpretation of a completed correction, as long as one manages entries and risk properly -- nothing wrong with that and NOT TRADING ADVICE).  The chart which follow this one will show what bears need to do if they want to keep fighting here:

(continued, next page)

Near-term, IF this was a simple sharp ABC down, then it has enough waves to be complete.  If BKX sees another low, then the decline will be impulsive, and we'd probably have to assume a more drawn-out corrective phase was underway:

In conclusion, we're approaching a moment of truth for the market now, and we'll likely be able to add more confidence to the near-term bull or near-term bear interpretation fairly soon.  Trade safe.

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