Friday, January 28, 2022

SPX Update: Other Than That

The market has remained stuck in a trading range since January 24, so there's little to add to the past few updates, except to note that I have examined some additional markets since then, and so I'll reiterate that I think any sustained new low will put the odds increasingly in bears' favor.  Meaning if that condition is met, it will become increasingly likely that the bull market we've been in since 2009 has truly ended.

Other than that, not much to add.  ("Other than that, Mrs. Lincoln, how was the play?")

Although I should mention that I noted in the forum during the session yesterday that, near-term, I suspect yesterday's low in SPX is a b-wave, meaning the market should break that low.

Note that SPX has, so far, been unable to sustain trade back above black (cue AC/DC):

In conclusion, while I spent most of December warning that it was "Time to Sell the Rallies," to reiterate: if SPX/ES sustain a break of this month's low, odds will increase that a true bear market has finally begun.  Here, I'd like to quote a bit from one December update:

Now, here's the "market point": The Covid crash was a pretty clear fourth wave. That means we have almost-certainly been riding out the fifth wave ever since. And the fifth wave is the final wave of a move -- which, now that we're finally getting into a potentially-complete wave structure, means we're likely approaching the end of the 12+ year bull market. 

What we're currently trying to nail down is whether the fifth wave of the fifth wave of that larger fifth wave has completed or not. 

Read that again. 

As I mentioned last update: 

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. 

In other words, even if SPX manages to make a new all-time high, we are probably into territory where we should be considering selling the bounces. Let's look at the near-term chart first, with the emphasis that "bull 5," even if it shows up, could very well be the final high of this 12+ year bull market.

Trade safe.

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