Monday, December 20, 2021

SPX and COMPQ Updates

Last update concluded:

[W]hile I've been leaning toward a fifth of bull: 5, we now have enough structure in place that we have to more seriously consider the possibility that it completed as a failed fifth. We'll see how the market reacts to the zone near and/or a bit south of 4600 (assuming we get there), and if it can't find support, then we'll take it from there.

And on Friday, SPX hit 4600 almost on the nose, and bounced hard.  Today, it's going to drop through that zone right at the open.  Bulls will need to sustain trade back above 4600 to give themselves a shot at the complex iv discussed in Friday's update (which brings us to the typo that was on Friday's short-term chart):

As noted on the chart, there is also always the possibility of a complex 4 instead of the complex iv that was discussed.  4 is one degree higher than iv, so a complex 4 could technically revisit the zone south of 4500 -- but that zone would be too deep a retrace for iv.

Anyway, no clear answers yet as to whether ALL OF 5 completed, or whether it's still subdividing.  I hold to my view that the top is closer than the bottom (long-term), unless there's a breakout at the very long-term trend line I've mentioned repeatedly over the past few weeks.  That trend line will remain as the first litmus test where I might question my current thesis:

Speaking of long-term trend lines, COMPQ has a line below the market that may become relevant again very soon:

And finally, SPX has the median line discussed last update, which is even closer than the VLT line, and is still keeping a lid on things for now:

In conclusion, the chart picture could change if there are multiple breakouts, but unless and until that happens, there's not much for bulls to get excited about.

Also wanted to mention in advance that I will probably not do an update for Christmas Eve, because it's, you know, Christmas Eve.  I traditionally also take the week off between Christmas and New Year's Day (well, about half the time I do, anyway), so Wednesday's update will probably be the final update until the New Year.  Trade safe.

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