Wednesday, April 29, 2020

SPX, INDU, NYA: Interesting Times

So a few interesting things have happened since last update.

First off, SPX locked in the three-wave decline at 2727 (recall that three wave moves are corrective, meaning against the trend):

Second, INDU tested the blue trend line discussed previously, and found at least temporary resistance.  It looks like it may test it again today, and we'll see if bulls can get through it or not:

Third, and this is a big one, the rally off the March crash low is starting to look reasonably impulsive.  This is significant because one impulse begets another.  I've been saying since the March low that I'd view the next decline as a buy op... we just never got a decent decline.  MAYBE we will at some point... but do note that the market does NOT need to stop anywhere near red "1?"

Until we see an impulsive decline, the rally can continue as long as it wants.

Finally, SPX is approaching the next (previously-discussed) resistance zone of 2950-3000.

Stepping back a bit to view the bigger picture, I'm tempted to toot my own horn here, because the chart below was originally published like this:

And now looks like this (below)... with the market not only having dropped perfectly down to tag the red C of 4 label (in a literal history-making crash), but now having also bounced massively since hitting that target.  (This is one of several hundred examples of why I'll strongly debate anyone who asserts that the market is "random and unpredictable.")

In conclusion, the long-term preferred count continues to look increasingly reasonable.  (I plan to publish a larger discussion on this either Friday or Monday.)  Near-term, SPX is approaching next resistance, but again, bears may be wise to await an impulsive decline before getting too excited.  Trade safe.

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