Friday, October 28, 2022

SPX and TLT: Last Monday's Update Absolutely Nailed TLT

Last update noted that COMPQ had reached intermediate resistance and that SPX had captured its next upside target, and that this could generate a reaction, which would most likely be a fourth wave.  We've had the anticipated reaction, now we find out if it is indeed a fourth wave.  No change to the chart below (the annotation is from 10/26), but I did add a bit more detail to the (seemingly most likely) micro wave count.  Note that gray iv has some room to play around a bit if it wants:

Next, let's take a look at Monday's if/then price projection, which has played out pretty well so far:

Also, let's revisit COMPQ, which is probably responsible for the market's hesitation here:

The caveat regarding the potential micro fourth wave and how it contrasts with COMPQ is that this is intermediate resistance, so as I warned in the last update, bulls probably shouldn't get complacent just yet.  

And last, a quick follow up:  On Monday, for TLT, I issued the first warning I've given to bears in a long time, writing:

Finally, TLT is firmly into its target zone now, so I'm going to give my first warning for "bear caution" since I published this target back in April. As of yet, there's nothing even vaguely bullish in the chart, but my gut has started saying: "be careful, bears" -- for whatever that's worth.

That turned out to be the exact bottom, and TLT proceeded to launch the largest bounce it's had in 3 months (so far):

In conclusion, by all rights, SPX probably does still need another wave up, but we still have to remain cognizant that this is an intermediate resistance zone, because off-beat patterns do show up every now and then to keep us on our toes.  As long as SPX holds above 3762, nothing gets too complicated yet.  Trade safe.

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