Wednesday, January 8, 2020

SPX and INDU: Room to Correct

Last update noted that we were at an inflection point and that we should at least be alert to the option of a larger correction.  Let's get right to the charts to examine that option.

First up, as noted last update, INDU did capture its October target:

Second, we can see SPX could test a similar line:

Finally, on a weekly time frame, SPX has plenty of wiggle room to correct here and still remain within both its long-term and intermediate-term uptrend channels:

In conclusion, as long as the all time high holds, I suspect we see at least a modest correction here, but will have to see if a potential ABC develops into an impulse to determine if that will turn into anything more than a near-term stall.  Trade safe.

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