Monday, November 8, 2021

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.

1 comment:

  1. Easy call. Just buy any dip till January. I expect this holiday season with lots of drinking to allow for a new all time high in sentiment and declaration of a New Paradigm. 40 years of deflation creates a guaranteed understanding it will be permanent. The shock from all the events coming together will result in a huge spike in inflation with accelerated measures moth over month. Shiller SP500 P/E just hit 40. RUT woke from a one year sleep. Next correction should set us up for on last dead cat bounce before a very long hard winter. Not many believe this is even possible but if we can absorb the complete dismantling of our republic with a yawn and the notion that the Holocaust a hotly debated opinion we can certainly keep the same blinders on when it comes to the stock market. Just don't look at the long term charts or valuation models. do so at your own risk of waking up. Text book course for how bubbles are formed and ignored.