Wednesday, June 19, 2019

SPX and INDU: Moment of Truth Finally Arrives

A little more than a week ago, I published a one-minute chart and described an expanded flat as the preferred count, which would still need higher prices:

So this gets pretty tricky now, because we DO have an impulsive decline, but if the read above is correct, then that impulse is wave C of an expanded flat -- which would mean things are about to get whippy -- perhaps with a fake-out breakdown near the low, then a run back toward/beyond Tuesday's high, which could then mark the completion of wave 5 of C and reverse AGAIN heading lower.

I noted that I wave favoring higher prices by a 55/45 margin, and yesterday that count was finally validated by the market.  I should note that that NEAR TERM preferred count (of an expanded flat) being correct does NOT impact the larger count in any way.  In other words, sometimes I can make a read such as that one (which, in its simplest form was: "market still looks headed higher") correctly, but that doesn't mean that the next HIGHER degree wave will do what we "want" it to.  There are enough waves for C of 2/B to finally be complete, though, so...

In terms of the bigger picture, the "moment of truth" is finally here:

SPX is in a similar spot -- NOTE THE TYPO -- "2895" should read "2955" ("invalidated above 2955"):

In conclusion, both the preferred AND alternate counts had us pointed higher until this moment, but now they begin to diverge.  Fortunately, the market has rallied enough that the risk to bears is relatively minor against the all-time-high in SPX.  Beyond that, there's not much to add; now it's simply up to the market to "do or die," and it seems to be content to let the Fed "decide" its fate.  Trade safe.

No comments:

Post a Comment