Monday, February 28, 2022

SPX, COMPQ, TRAN: As in December, I Remain "Long-Term Bearish Until Proven Otherwise"

This weekend, I was asked where I stand, so I want to reiterate my stance, which has not changed since December, and which is best stated on this chart (from January):

I keep trying to drive home the idea that the near-term just doesn't matter much here.  As I mentioned elsewhere, it's probably not wise to get too hung up picking up pennies on the track when a freight train is bearing down on you at full speed.  

So once again, as clearly as I can state this:  Since December 2021, I have been, and remain, bearish until proven otherwise.

Along those lines, I was combing through my chartbook this weekend and came across the chart below, which was first published on May 1, 2020 within the piece "Is America Approaching the End of a Supercycle Rally?"

Here's the chart as first published (see link above), nearly two years ago:

Here's the chart now, with nothing moved:

Ignoring the fact that both the timing and price are completely ridiculous, that chart helps illustrate why the near-term just isn't where our focus should be right now.

Also, I'm leaning more and more toward this being Supercycle V instead of III, so make of that what you will.

Nevertheless, here's a more "optimistic" option, via TRAN;

A closer long-term view on SPX reveals what bulls need to do to get back in the game here:

Near-term, if the idea that there are only three waves into the low is correct, then the primary options are "bearish now or bearish later":

SPX likewise stalled short of overlapping wave A/1, leaving both the "bearish now" and the "bearish later" options on the table:

Finally, a reminder of how big a Supercycle wave can be:

In conclusion, the new low last week does help bears and brings the odds that a long-term bear market has begun closer into their favor.  Bulls aren't entirely out of the game yet, but their chances are dwindling.  Trade safe.

Friday, February 25, 2022


Yesterday, SPX gapped down, then spent the rest of the session clawing higher.  As the charts will show, this could be the start of a larger rally, but there are a couple hurdles for bulls to clear first.  I'll let the charts do the talking from here.

First up, COMPQ:



And a bonus chart of Gold:

In conclusion, the previously mentioned ambiguity at the most recent swing high (to B wave or not to B-wave, that is the question) makes things a little complicated now, but that B-wave option is not dead yet.  Bulls will likely face their first test in today's session (the fourth wave inflection discussed on COMPQ and implied on SPX), which may give us more clues.  Trade safe.

Wednesday, February 23, 2022

SPX and COMPQ: Downside Targets Captured

Yesterday, COMPQ and SPX both captured their respective target/inflection zones.  Below is COMPQ's chart from 2/16:

Here's that same chart today:

In a similar way, SPX tagged its most recent 3/C label:

In conclusion, recent downside targets have been captured, now we find out if the market intends to turn this decline into an impulse, or keep it corrective and put together a larger bounce.  In other words, the "easy" money may be over for the moment, and it's up to the market to declare its next intentions.  Trade safe.

Friday, February 18, 2022

SPX and COMPQ: No Material Change

Note:  The Forum is back up and running

Not much to add to the past few updates, so short and sweet again today, starting with SPX:

COMPQ seems on track, barring a more complex correction to the current micro wave (a more complex correction could play out similar to SPX's shown "or 4" option):

Other than that, not much to add to the past few updates.  Trade safe.

Wednesday, February 16, 2022

SPX and COMPQ: What Bears Need

Since last update, SPX found support at 4364.  4364 is too high, at least for bears.  Because if that level were to hold and SPX were to rally back up north of its last swing high (4590), it would actually open up options that are bullish enough to make a new ATH.  Let's look at the charts, starting with COMPQ, which, like INDU, might have a b-wave high at its February high:


In conclusion, to keep things reasonable, bears would like to see a break of 4364 before the market even considers heading back above 4590; otherwise, it would leave options open for a bull nest.  Trade safe.

Monday, February 14, 2022

SPX Update

Today is Valentine's Day, which means the Easter Bunny might decide to give some trick or treats to bulls and bears for Christmas.  Or whatever. 

Not much to add since last update, other than to note that the preferred count was a hit:

In conclusion, no change from last update, with INDU still keeping this from being obvious.  We'll see how the market reacts to the nearby inflection zone.  Trade safe.

Friday, February 11, 2022

SPX and INDU: Slightly Divergent

CPI came in yesterday, indicating that inflation has reached a 40 year high.  The market initially only heard "high" and figured hey, that must be good!, so it rallied, until it realized it was being stupid, and then sold off, promptly giving back the day's gains.

This leaves SPX in an interesting position:

One potential fly in the ointment for the bears is INDU, which also looks like three waves into yesterday's high, but which broke its prior swing high.  This type of price action can sometimes imply that further upside is still needed to resolve the pattern (though this "further upside" can come after, in the example below, INDU heads below 34.8K (in the case of a b-wave high), it could also come immediately, in the case of a bull nest or ending diagonal -- the latter two seem less likely, but can't be ruled out).

In conclusion, SPX is a clear three wave move from 4451 to yesterday's high.  The cleanest pattern would be the abc as shown, but just in case SPX holds above 4451 and breaks yesterday's high, then we could be dealing with a bull nest or an ending diagonal (the diagonal would probably be my first choice of those options).  If the abc/3 as shown plays out, then we'll still be left with the question of INDU, but we'll burn that bridge if we come to it.  Trade safe.

Wednesday, February 9, 2022

SPX Update: Range-Bound

We've had a range-bound market for the past week or so, thus there's just nothing to add to recent updates:

Big picture, the key trend line is still intact, obviously:

Beyond that, there's just nothing to add.  Trade safe.

Monday, February 7, 2022

SPX Update: Short and Sweet

Short and sweet update today, since there have been numerous detailed updates recently, and thus there's very little to add to those updates, except to note that SPX bounced directly off the first horizontal support zone highlighted in Friday's update:

Other than that, not much to add that isn't a rehash of recent prior updates.  Trade safe.

Friday, February 4, 2022

SPX Update

Last update called out the next potential resistance, and SPX stalled almost too cleanly at the first tag of that zone (also, note:  "overlap at 4418 WOULD suggest the rally was a three wave structure, etc."):

Potential "support" zones are highlighted on that chart now, but if the market has turned into a bear already (i.e.- if no final fifth is coming), then market participants may find that support "ain't what it used to be."

Longer-term, bears still want to see a whipsaw back into the channel to help confirm their intentions to take over the market:

Beyond that, not much to add to the past few updates.  Trade safe.

Wednesday, February 2, 2022

SPX, NYA, COMPQ: 2-2 Twain

As those of you who own calendars are no doubt aware, today is 2/2/22, which is the only time in our lifetimes that the only digit needed to write the date will be "2" (except for 2/22/22, which is farther away than it seems) and there won't be any other dates like those until the next one (I'm too lazy to look up or calculate when that will be; I've got an update to complete!  Probably 3/3/33.).  2/2/22 is also a palindrome, for people whose favorite month is "22."  And it's the closest we'll come to riding the "too-too twain" (with a nod to the movie Murder by Death).

Anyway, there are a lot of charts to cover today, so we need to quit messing around here.

First up, the current bounce began in an area that made sense, and which we discussed repeatedly as "the zone bears need to beat" last week:

A similar look in COMPQ:

Near-term, SPX has a couple of trend lines that could act as next resistance:

On COMPQ, the zones are horizontal:

And finally, NYA continues to show the bull option:

In conclusion, SPX captured and exceed the 4525 target given in the last update, which is no surprise given the long-term support lines, and is now approaching its next potential resistance zones.  The big question is whether this is a fifth wave to wrap up the lingering question of whether the all-time high was a b-wave, or a true "bear market bounce" (i.e.- second/fourth wave).  COMPQ is one of the clearer markets to watch for a possible early answer to that question.  Trade safe.