Tuesday, May 30, 2017

SPX and INDU: Second Verse, Same as the First...

Friday was an exciting day in the market, if you like days that are great for a round of golf and/or spearfishing.  Virtually nothing happened price-wise, as SPX compressed itself into a tighter and tighter range, apparently in the hopes of vanishing into a singularity of its own creation.  Since then, the only thing that's happened event-wise is that the Fed's Kaplan came out and said that "some correction" in stocks could be healthy (translation: the Fed might start trying to talk the market down).

The Fed does this every so often, in an effort to appear responsible to the average citizen, and so they later have "plausible deniability" when everyone starts complaining about market bubbles. 

"Remember?  We tried to warn investors about that bubble!" the Fed will say, with a completely straight face, "It's not like WE have any control over what people do with our free money!  Sheesh."

So maybe this is part of the precursor to the larger fourth wave we're currently on alert for.  Due to the market's "can't do" attitude on Friday, there's not much to add today except minor updates to the charts.  First up is the intermediate picture:

A few minor additions to the near-term chart:

And a quick INDU chart, mainly because it's interesting that INDU hasn't yet broken its all-time-high.  Technically, this pattern starting at blue 1/a wouldn't be a TRUE abc, but I sometimes prefer such labeling for ease of reader comprehension:

In conclusion, essentially nothing happened on Friday, so there's no change from the prior update, and I'm still more inclined to think the top is probably closer than the bottom -- but there is still no decent-sized impulsive decline on the chart, so it's not impossible for the rally to run a bit longer first.  Trade safe.

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