Wednesday, May 1, 2019

SPX Update: A Look Back

Probably the most interesting thing to happen since last update is the fact that SPX made new all-time highs.  This validates my decision to essentially capitulate on the bear counts, which I did publicly back in early January (I did so a little earlier privately, but waited a bit before publishing -- because there's nothing scarier for an analyst than the thought of voiding the bear count as preferred only to have the market crash the next day.).  Here's what I wrote back then:

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.

And so here we are, having refrained from fighting the trend along the way... and with the new all-time highs now officially "resetting" all the most bearish counts.  The most bearish count was that a new motive series down had begun, though we were never that bearish in the first place.  At my most bearish, I thought the decline was only a C-wave, which is still a corrective wave that ultimately ends in new all-time highs.  That has proved correct; the bottom simply came just a hair earlier than looked "right" -- but we can see on the chart below that even the "bear count" led to new all-time highs fairly directly.

Today is, of course, a Fed day... which means that if the market wants to throw a curve ball, this is a good day for one.  At this stage, we still can't rule out the more complex flat I spoke about in the January 9 update (chart dated 1/7, because I drew it then, and originally intended to publish it then).  Here's the chart I published in January:

The red path has played out very well.  Now the question is whether we'll get the more complex "Curve: (c) of B" and larger actual C -- or if ALL OF C was instead completed back in December.

Beyond the new all time high, there's nothing to even update about the current charts, and I bet no one would even notice if I just republished Monday's chart.  Not that I would ever do such a thing!

In conclusion, bears do have a shot in the near future to activate the "curveball" path discussed in January -- but it's only a shot at this point, not even close to being a "done deal" yet.  Accordingly, we'll be watching carefully for impulsive declines -- but continuing to show patience if we don't get one.  The most bullish current count would still take us toward the 3070-80 zone next.  Trade safe.

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