SPX, INDU, VIX, NYUD: No Surprises So Far, But Caution Anyway

On Monday, we talked about the "market almanac" for Thanksgiving week traditionally being bullish (not this year!), but the market is dynamic, and by Wednesday, we had this warning:

Bigger picture, SPX came within spitting distance of the standing 4750 target: And that, likewise, contributes to the "easy money may be over" sentiment, as that's close enough to the target zone that an alternate count of ALL OF 5 as complete at least should be kept in mind.

Then on cue, Friday turned into a complete rout, with VIX spiking more than 50%, the 4th largest one-day gain since 1990:

This is obviously an extreme reading from VIX, and normally extreme readings lead to snap-backs, temporary or otherwise.

NYUD is also interesting here -- we can see that similar readings in the past tend to be followed by a bounce.  Now, the bounce that follows the extreme is not always the "final" low (see: Sept. 2020), but it has led directly to new highs several times:

Moving on to the price charts:  On Wednesday, we talked about how it's common (but not required) for Wave 4 to return to the price territory of Wave iv, and Friday put us directly into that price territory:

So, beyond the swiftness of Friday's drop, there wasn't anything particularly surprising about it, and I didn't even need to move the second "bull: 4?" label.  That said, again, as noted Wednesday, we are into trickier territory with this market now, and ALL OF 5 complete at the all-time-high still can't be ruled out.  

INDU (next chart) contributes its own warning to the mix: 

Finally, the long-term SPX chart:

In conclusion, the fourth wave for SPX is still on the table, but as I mentioned on Wednesday, things are a little trickier now, and we can't rule out ALL OF 5 having already completed.  Even if SPX manages to make a new high, that will probably be the fifth wave, and (barring an extension) is thus reasonably likely to be followed by a correction (or worse) anyway.  If INDU makes a new high too, then things might get more bullish again, and (were that to happen) then we could consider fifth wave extensions and ending diagonals -- but for now, we appear to be in territory where a healthy dose of bull caution remains in order.  Trade safe.

SPX (almost) Captures October Target

On Monday, SPX came within about 6 points of capturing the standing target from October 27, which also completed the fifth wave higher that was anticipated by the near-term preferred count.  For the past few weeks, I've continued reiterating "Bull: 3 is likely still unfolding," but now we finally have enough waves in place that Bull: 3 could at last be complete.

Unfortunately, that means the easy money may be over for the moment -- at least, if the fourth wave decides to become complex, anyway. 

Bigger picture, SPX came within spitting distance of the standing 4750 target:

And that, likewise, contributes to the "easy money may be over" sentiment, as that's close enough to the target zone that an alternate count of ALL OF 5 as complete at least should be kept in mind.

In conclusion, the preferred count has done its job and kept us looking higher for the past month, but the market reserves the right to get a little trickier now over the near-term.

Side-note:  Most years I don't do an update on the short trading session after Thanksgiving, as it's a holiday and I have a family -- so I wish all my readers a Happy Thanksgiving, and the updates will return on Monday.  Trade safe.

SPX Update: No Material Change

Still nothing to add from the past few updates, and no material change (other than to slide the less-relevant "alt:" label over slightly):

It's worth a mention that, traditionally, Thanksgiving week is one of the most bullish weeks of the year.  That sort of "market almanac" data never guarantees anything, but it's always worth knowing.  Trade safe.

SPX Update: No Change

Last update discussed two alternate options, but those continue to remain as alternate counts for now.  As I said on the forum on that same day (in response to a query):

...the 5th wave idea is back-burner unless/until we see a larger impulsive decline. When possibilities arise, I try to cover them in advance so there are fewer surprises down the road.

In conclusion, no change from last update.  Alternates remain alternates for now, meaning bull 3 is probably still unfolding.  Trade safe.

SPX Update: Louder, For the People in the Back

In the prior update, I wrote:

At this point, bears main hopes would probably be for a more complex iv that retests the ATH before returning to break the low.

And yesterday, SPX indeed retested the ATH.  It has since stalled, at least keeping open some near-term bear options.

Now, I have to discuss the fact that there is more than one possibility here, which is, of course, going to make people who don't understand how the market works and who don't know how to manage risk very angry, but not much can be done about that.

So here we go... chart first:

The essence of what we're up against here is that

1.  The rally to retest the ATH appears to have unfolded in 5 waves, which, by virtue of itself, leaves open the option of a failed fifth.  Ideally IF THIS EVEN IS A FAILED FIFTH, then it would be v of bull: 3.  However

2.  Because it isn't 100% clear that small iii and iv aren't large 3 and 4, there is at least the possibility that the failed fifth (IF THAT'S WHAT THIS WERE TO BE) marked ALL OF larger bull: 5 (at the degree shown on the chart above).

For now, we're going to presume that the market still needs bull 4 and bull 5... but if we see a larger impulsive decline develop, then IF THAT HAPPENS, we will consider more bearish options.

Trade safe.

SPX and GOLD Updates

Last update noted that we'd presume iv completed at the lower blue trend line, and "so far, so good," as SPX has continued to rally from that low:

At this point, bears main hopes would probably be for a more complex iv that retests the ATH before returning to break the low.  Always possible for a wave, especially a fourth wave, to become more complex -- but it does not NEED to, as it completed the minimum pattern requirements for a fourth.

Next up, gold has continued to hold the last-noted low, and is now threatening a breakout... so it seemed like a good time to update this chart:

In conclusion, still no real change yet for SPX.  Trade safe.

SPX Update

So far, no real change from last update.  SPX did drop down to the noted lower trend line:

Nothing to add bigger picture:

In conclusion, not much to add to the past few updates... so far.  Trade safe.

SPX Update

Since last update, the market followed through a little on its initial reaction to blue resistance:

This was not outside the realm of possibility, and SPX dropped down toward the small blue "or iv' label that was on Monday's short-term chart:

In conclusion, nothing too surprising YET... but in the event that the current decline were to turn into a larger impulse, then we would at least keep alert to the possibility that ALL OF Bull: 3 completed at the ATH, which would turn the current correction into the larger bull: 4.  Other than to bring awareness to that option, no real change so far.  Trade safe.

SPX Update: Something to Watch For

Last update expected that the first upside target would be captured, so let's start with that chart, where we can see SPX perfectly tagged the blue trend line, sparking Friday's mini-selloff:

Looking at the near-term and breaking down the micro count, it appears Friday's mini-waterfall was probably just a micro fourth wave within bull: v of bull: 3; if that's correct, then bull: 3 is still unfolding:

What sometimes happens when a third wave is facing a major trend line (such as the blue line on the first chart) is that the peak of 3 actually runs beyond the trend line (third waves are strong waves, so that's where the market is most likely to power past prior resistance or support), then the fourth wave falls back to test the old broken trend line... then new highs are made again in the fifth wave, after that first "successful" back test.  That's certainly at least something to watch for here.  Trade safe.

SPX Update: October 25 Upside Target Captured

Last update expected the Fed day to follow recent patterns, and it did not disappoint in that regard, following that description to the letter.  It also noted that there was at least the possibility of a small corrective fourth wave, but it appears the market has chosen to extend the current (micro) fifth wave instead, forestalling that small correction until later.

Bigger picture, at today's open, SPX should capture the upside target from October 25:

In conclusion, again no change, and the trend still remains up for now.  The first bigger picture upside target should be firmly captured at today's open.  Trade safe.

SPX Update: No Days Like Fed Days

For roughly the past two weeks, "bull: 3" has been hovering above [whatever the current price was for each day] the market at higher prices, but yesterday, we finally got into that zone:

So we are finally at least into the lower edge of the bull: 3 target zone, though it can run a bit higher if it wants before correcting into bull: 4 (or before completing black C, which bears would love, as it would lead to a revisit of last month's lows).

The 10-year Trash-ury yield is interesting here, and worth keeping an eye on:

Today is, of course, a Fed day, which -- if the last few years are any guide -- means the market will act like it's going to go crazy during the first half hour it's open, then will settle into a trading range and try to put everyone to sleep, then will go crazy again right as the announcement is made... then MAYBE will actually do something for the last couple hours, or may just do another head-fake/whipsaw.  

"Fed days are fun!" -- Nobody

It will be interesting to see if there's any reaction to the blue "bull: 3" or black bear C zone, though.  Trade safe.

SPX Update: Trending Markets

As is typical in a trending market, there's not much to add since last update.  The near-term preferred count (that bull: 3 was still unfolding, per 10/25 annotation; and last update's presumption that the trend remained up) proved good with the new all-time high on Friday.  It's three waves up from 4551 to the new ATH, so there is an option for bull: iv to become more complex if it so chooses.  Otherwise, we're in the midst of another small subdividing rally wave (counting up from 4551) that of itself will need a small iv and v.

No change to the bigger picture, either:

In conclusion, trending markets are... well, trending, so until that changes, there's not much to add after you've identified that trend.  Trade safe.