Wednesday, March 15, 2023

SPX, BKX, NYA Updates

Since last update, SPX captured its 3820-45 target (from March 8), exceeded it by about 10 points, then bounced.  That's potentially 3 waves up off the 3808 low (to 3937), so bears can take it back below 3808 from here if they want.  

Given where we are in the big picture, this is market is very possibly hanging by a thread, so countertrend trading (i.e.- bullish trades) should be kept on a very tight leash unless and until there are more bull signals.  The most bearish case is that we've already entered Blue 3 -- and frankly, there's nothing currently in the charts to suggest otherwise.  That can, of course, always change tomorrow, but this is what's in front of us right now.

Probably the front-runner for the "bull" options (not long-term bullish) would be the expanded flat discussed on March 1:

One can at least envision a world where the Fed announces at its upcoming meeting it's going to pause rate hikes and the market gets excited, leading to the option above. 

NYA has continued to track SPX:

And finally, we haven't update BKX in a while, but it has confirmed my long-term bearish outlook and finally officially captured its 90 target from way back on May 1, 2022 (bottommost annotation).  Also, I'm getting flashbacks to the 2008 bear, where BKX often led the way down:

In conclusion, we can come up with a scenario where BKX completes the blue 5 potential and SPX runs the expanded flat (2nd chart), but those are best-case bull scenarios, and the worst-case bear scenario is a third wave waterfall lower that erases 1400-1500 points from SPX's current levels.  In both cases, the long-term outlook remains bearish, as it has for over a year now.  Trade safe.

(Incidentally, I published another piece earlier this morning:  Why? Because It's Really Important)

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