Monday, May 13, 2019

SPX and INDU: Market on the Brink

Let's get right into the charts today.  First up, let's take a look at what caused Friday's bounce, because it's an important zone that bears will need to get, and stay, below:

Next, I'm about 50/50 on the red intermediate count below.  Getting close to making it the preferred count, but not QUITE there just yet.  For now, suffice to say it's very much in the realm of possibility:

Near-term, Friday's low appeared to make wave b of an expanded flat:

In conclusion, bears have very much kept alive the "curveball count" that I first discussed 4 months ago... and then finally called attention to again on the very same day as the SPX all-time high.  That count isn't the only option here, but it's probably at least even odds at this point.  The next, and critical, step for bears is to sustain a breakdown at the very long-term trend line noted in the first chart.  Trade safe.

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