Monday, November 16, 2020

SPX Update: Two Intermediate Options and a Glance at the Long-term

Last update, I noted the option of a triangle (largely because I wouldn't be around in real-time to point it out if it came to pass), and the market elected to ignore that option and run to a new all-time-high.  This does finally confirm the read that the last two declines counted as complete ABCs, at least -- and it opens up two fairly defined options from here.

If the market wants to go the straightforward route, it could keep running higher in an apparent third wave.  If it wants to complicate things, then it could instead turn the current high into a b-wave.  I've outlined both options below:

On another note, INDU has finally made a new all-time high, thereby officially confirming the count that everyone thought was crazy just a few short months ago:

(Below is how that prediction looked when it was first published in February):

Now, this brings up an interesting point:  By all appearances, the market seems to currently be within a fifth wave at multiple degrees.  Given the size of the preceding waves, it could certainly run higher for a while before topping (potentially much higher if we get a fifth wave extension) -- and referring back to the first chart, it appears it does indeed still need to run higher, so the anticipation of a fifth wave is not in itself a reason to start shorting.


But it is something to be aware of.  The end of America's long run of prosperity may finally be peering back at us from the edge of the horizon.  Still off in the distance, but finally visible.  And I think, unfortunately, that many of us can see exactly what will get us there.  But that's further discussion for another time, perhaps.

In the meantime, the party is still going -- even if we can see that its time is gradually drawing to a close.  Trade safe.

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