Wednesday, January 9, 2019

SPX Update

Last update noted that if bulls could clear Friday's high, then there was little resistance in SPX until 2585-2600.  That level was hit by the E-mini futures in the overnight, so we'll see if the market reacts to that at all.  So far, bulls have just kept chugging along with this rally.

The next chart was one that I drew up for the prior update, and I'd intended to publish it with that update, then apparently forgot to upload it.

One of the traps I see Elliotticians fall into, time and again, is linear thinking.  It's easy to forget that just because one is expecting a c-wave decline (or similar) does not mean that the market has no other options.

There are times when both the near-term and intermediate-term require a resolution in one direction, and those are the high probability times.  Then there are times that can feel like a coin flip, because they almost are.  During the latter times, there will be "dead spells" where the market needs to do X in order to tip its hand, and unless/until it does, it's sometimes unwise to do anything other than ride the current trend until the market says otherwise.

The chart below shows one optional way the market could throw a major curveball here:

In conclusion, there are still no indications the rally is complete -- or even that it will do so -- but we are nearing the area where an ABC rally (IF that's what this is) could complete.  We'll stay alert to possible signals of that -- the first signal would be a clean impulsive decline that isn't part of an expanded flat.  Until then, bears need to continue remaining cautious.  Trade safe.

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