Wednesday, February 19, 2020

SPX and INDU Updates

Since last update, SPX has continued wrestling with the 3383+/- resistance zone that I called out a while back.  So far, there's no larger impulsive decline to add confidence to the near-term bear option of an expanded flat.  INDU most clearly seems to illustrate the (so far) three-wave nature of the decline:

SPX, on the other hand, now has three small impulse waves down from the all-time high.  This suggests a sustained new low could be part of a bear nest.  The bull option is for a "double three" correction (that would become confirmed if SPX makes a new ATH).

In conclusion, SPX has remained stalled in this zone, which does at least confirm the read of 3383+/- as resistance.  What it does not tell us yet is if that zone will continue remain resistance.  The more a zone is tested, the weaker it tends to become, as the market works through sell orders (or buy orders, when dealing with support).  Bears need to sustain a break of Tuesday's low -- but if they can, that would help their case greatly.  If bulls can instead power up through resistance and hold the breakout, then the near-term bear options would be reset.  Trade safe.

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