Wednesday, June 23, 2021

SPX and INDU: Timely

Last update noted that INDU had reached its minimum downside requirements, which presented the possibility that the decline was done -- and the market has rallied virtually straight up since then.  Current options discussed on the chart below:

INDU has likewise rallied almost straight up since reaching its first downside target zone:

In conclusion, last update's warning proved timely.  But as I also noted last update, for a more clean pattern, I'd have preferred to see SPX and NYA behave more in line with INDU -- but the jury is still out on that.  Even if SPX makes a new all-time-high, bears will have a small window to try to turn that into a diagonal, instead of the "obvious" bull nest.  If bears can't mount a defense, then SPX could launch into an (apparently) nested third wave rally... and do keep in mind that all that is moot if SPX remains stalled shy of the ATH.  Trade safe.

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