Monday, June 7, 2021

SPX and NYA: Bull Case/Bear Case

This market remains range-bound, so let's look at the bull case/bear case today.  We'll start with the near-term SPX chart:

We can readily see the option for an ending diagonal, which would likely still need a new ATH, followed by a decline back below 4234, followed by another new ATH.  Bear B will also remain on the table for a time (with or without the diagonal).

Longer-term, the chart below shows the bull case if no diagonal or B-wave materializes:

NYA's longer-term chart would really look better (for bears) with a more complex 4th -- otherwise, the wave might be too short to be a "proper" 4th, and we'd have to consider the option that it simply isn't the proper 4th yet.  The extended fifth option (i.e.- (i) of v and (ii) of v discussed below) would align with the SPX breakout option discussed above.

Near-term, NYA is trying to get back above its recent ATH, which we suspected would be coming sooner or later:

In conclusion, I'm not too fond of this market.  The rally (for a while) has been acting like a slow-roll extended fifth, which means -- if this is an extended fifth -- it might not even have reached the blow-off stage yet.  The blow-off typically arrives in the final micro extension of the final fifth (see: 2018), and moves faster than we've been seeing.  If that's going to occur, we'll know it when we see it (and that's about all we can say about that).  Either way, the more complex flat is still a possibility, so we'll see what it wants to do here.  

Also, I may need to take Wednesday off, as I have some late-in-the-day plans on Tuesday.  TBD.  Trade safe.


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  2. Agree! Extended 5th most likely. Only way this last spike move takes off is during July earnings season with no unexpected spike move on inflation front. Unanimous agreement that the FED's statement of it being temporary has to be shattered before a sharp drop occurs. Jolts report of 9 million unfilled jobs barely put a dent in upside move. Bitcoin has now quietly broken down. Complacency at extremes and likely to stay there till a sudden flash crash perhaps.

    1. Speaking of the FED...

    2. Speaking of the FED...