Friday, August 2, 2019

SPX and INDU: First Downside Target Captured; Market on the Edge

Well, the past couple sessions have been rather interesting, though came as no surprise to the preferred count, as the expectation for a decline to the 2955 target was met and exceeded.

The question now is whether this decline is going to turn into something even more significant, or if it's nearing completion.

Recall the larger inflection zone that the market has remained stalled at, which was discussed at length on July 12.  Because it's coming off a major inflection, this decline could easily turn more significant.

Near-term, INDU is difficult, but not impossible, to reconcile as complete/nearly complete.  The chart below discusses some challenges to watch.

In conclusion, the market performed as expected, and I'm glad I was able to warn readers well before the nasty declines of the past couple days got rolling.  The biggest challenge at this point is reconciling the decline as complete -- so maybe the simplest answer is that it's NOT complete yet.  As I warn bears during uptrends:  Await an impulsive turn -- and that advice now applies to bulls.  This could easily turn into an even-uglier decline, with the 2900 SPX zone now on the radar -- and possibly much beyond.  Bulls should await an impulsive rally before getting too committed.  Trade safe.

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