Wednesday, May 23, 2018

SPX and INDU: Still in the Chop Zone

Since last update, the market has continued to do essentially nothing, remaining within the same range it's traded in for the past two weeks.  Accordingly, there's really not much to add, although we do have a new inflection zone to watch on the downside:

INDU rallied up to tag the previously-noted blue trend line, but again failed to sustain a breakout.  The bull option is that this pattern is a developing flat, as shown in blue.  It should be of at least some concern to bears that the rally into the most recent high (blue b) appears to be three waves, which would suggest a flat -- but I do have to caveat that the last couple times we've seen this at peaks, the market has seemingly ignored it.

In conclusion, for the past couple weeks, I haven't been able to outline a clear trade -- and as it turns out, that's because there hasn't been one forthcoming from the market.  Instead, the market has continued chopping around and going nowhere.  I would now suspect that this will resolve, one way or another, in the reasonably near future.  Trade safe.

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