Friday, June 7, 2019

SPX and INDU: Leading Count Remains the Leader for Now

Last update discussed the options and warned:

Thus, given that option 1 and 2 are both bullish for at least the next 90 points or so, bears might want to await an impulsive decline before acting with much aggression.

We have not seen any impulsive declines yet, so hopefully this warning protected bears against yesterday's stop-busting rally.  While we can't entirely rule out Options 3 and 4 from that update, the strength of the current rally argues for Option 2, the "big C-wave" -- which was also the option I warned about on Monday, and which was discussed multiple times before that.

So the count that's been leading from the very beginning remains the leader now.  The SPX chart discusses that count in more detail:

INDU's chart doesn't discuss the running flat, but that's an option there as well:

In conclusion, assuming that the low is indeed a b-wave and NOT "ALL OF C," then bears will get a solid short op when the current rally completes.  There is a Fed meeting coming up on the 18-19, so that might be the logical spot for things to turn -- but we'll continue watching for impulsive turns in the meantime as well, because the discussed running flat does not need to exceed the a-wave high.  Trade safe.

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