Wednesday, April 12, 2017

SPX Update: So far, so good...

SPX finally broke from its short-term range, and headed down to the slightly-preferred "c of 2" zone on the near-term chart I've published in the past couple updates.  It promptly reversed higher and rallied 16 points, making for at least a solid short-term trade for anyone who bought that zone.  This was how I wanted to see the market behave if the preferred bull count is correct, so there's really not a whole lot to add, although I've added some targets and some caveats in the description on the near-term chart (below):

The in-between option that I haven't really mentioned is for the current rally to be wave C (with blue 1 being A, and yesterday's low being B) of a decent-sized ABC correction, which would likely peak in the vicinity of the first target zone (2385 +/-).  Nervous bulls might consider capturing at least partial profits if we reach that zone.

Bigger picture, there's no change so far.  If SPX were to sustain a break of 2322, then we'd give weight to the black "or Bull 4" option:

In conclusion, the slightly-preferred bullish count is performing as one would want it to, so there's no reason to add additional speculation to the outlook just yet -- but it's still a tight call, so I'm hardly advocating complacency.  If SPX breaks yesterday's low, it gets a bit trickier for bulls, although they still have the ending diagonal option until 2322 fails.  As long as yesterday's low holds, then the next meaningful upside target is in the 2385 zone.  Keep in mind that if c of 2 bottomed yesterday, then we are beginning a third wave rally, so we'd expect to see some strength from the market, beginning reasonably soon.  Trade safe.

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