Thursday, July 14, 2022


I had to head into town today to run a few errands, and on the way, I ended up behind a car with a bumper sticker that read:  "STAY NIMBLE PRAY" -- and I thought, "Boy, that's kind of an odd bumper sticker... but pretty sound advice for traders, especially in this market.  And probably not bad advice for all of America at this point in the Supercycle."  

But alas, my brief moment of reverie was ruined when I got closer to the car and realized that my recently-modestly-unreliable early-middle-age (or, as I prefer to think of it: "late-stage youth") eyes had misread the bumper sticker, and it actually said:  "STAY HUMBLE PRAY."  Which made the bumper sticker seem a bit less esoteric, but which is probably still reasonable advice both for traders and for America.

Anyway, I thought it a bit serendipitous, as today's update could certainly carry the theme of "STAY NIMBLE" (though not necessarily in ALL CAPS), as we'll see in a moment, starting with the BKX chart.  BKX made a new low, confirming the red (iv) label of the past few weeks... but so far, it's only three waves into the new low (three waves counting down from the (iv) label), which means either it continues lower until it forms a proper five-wave structure, or it bounces back up in a more complex (iv) (see: expanded flat), before heading lower later.

SPX has confirmed the read of July 6, when I noted that INDU had broken a level that suggested SPX's bounce would ultimately fail (which it did).  BKX puts SPX in a similar spot in regard to the potential for a more complex correction before heading lower (it could, of course, simply head lower immediately -- the broader point is that BKX's pattern is incomplete if it bottoms here):

In conclusion, BKX suggests that the pattern is incomplete to the downside, thus presumably both SPX and BKX are, in the words of the old Fram Oil Filter ads, in a "you can pay me now or you can pay me later" position.  This means that even if another bounce develops, more downside is likely still needed later (in much the same vein as the INDU chart suggested this same thing back on July 6).  The simpler resolution would be for both markets to just resolve this pattern with more downside immediately, but the market always reserves the right to take your money via complex corrections.  In other words:  "STAY NIMBLE PRAY."  

And trade safe.

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