Friday, July 24, 2020

SPX, INDU, COMPQ, NYA: Market is Still... This

This market continues to lollygag around, refusing to trend.  This is often what you see in an undecided market -- but once it makes up its mind, we could finally see a stronger directional move.  We've had hints this "non-trend" might occur here, because NYA, INDU, TRAN, et al, are all still below their June highs:

NYA below:

SPX remained stalled yesterday morning, then decided to go for a test of its breakout before doing anything else.  Nothing too surprising there; from last update:

All we can do is watch how the market deals with support as it comes down to retest it -- if prior resistance has turned into support, then bulls probably keep the ball. If support fails significantly, then bears may get their B-wave.

It's reasonable to assume that we'll see a more definitive test of support today or Monday, and as we can see on the next chart, support is still a bit below current prices:

COMPQ has also formed a pattern that, most of the time, suggests further downside is still needed:

In conclusion, the market is still unresolved, so the oft-discussed B-wave high remains on the table.  Near-term, it would not be unusual to see some downside follow-through at some point, though that doesn't need to be immediate, of course, we would normally expect lower prices at some point (as discussed above).  Trade safe.

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