Wednesday, November 17, 2021

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.

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