Monday, June 5, 2017

SPX, NYA, BKX: 57 Channels and There's Nothing On

On Friday, SPX broke above the previously-discussed 2429 level, which served as fair warning to bears for caution.  At this point, there is still no clear victor in the bull/bear wave count war, so it's best for bears to watch for impulsive declines before taking strong action.  I'll let the charts do the talking from here:

NYA's ABC count shown in the prior update was apparently correct:

And on the ugly side of the coin, we still have BKX lagging severely.  Either BKX is going to start rapidly making up lost bull ground, or something may be amiss under the hood that is not being reflected in the broader market yet.

In conclusion, there are still mixed signals out there, but (as yet) no clear impulsive declines in SPX, so bears need to stay on their toes.  As I wrote on May 26:'s a little difficult to envision a decent-sized bull wave underway here, but "difficult to envision" is hardly grounds for declaring it impossible.  It most certainly is possible.

At this point, bears will need to get something going in the reasonably near future to remain in the running.  There are roughly enough waves for a fifth wave (blue "Bear: (5)" on the SPX chart) to complete at any time, but until we see an impulsive decline, bearish thoughts remain speculative.  It will be interesting to see how SPX responds to its recent trend line breakout, and that may be the next signal to watch.  Trade safe.

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