Friday, June 23, 2023

SPX and NYA: Still Betting on the Bears

Last update discussed the gravity of the current inflection zone, and today's update will continue that theme.

The first chart we'll look at is NYA.  The thing about this chart is that if NYA were to sustain trade north of 16223, then that would imply NYA was in the third wave (current wave up from red b/2) of a still larger third wave (up from the low last year -- blue (C) would become A/1 under that scenario).  That's an extremely bullish setup, so I just have a hard time buying into that here, in part because the market seems to lack the fundamentals and liquidity to support such a bull run.

Thus, I'm betting on the bears to hold NYA below blue (C).  If they can't, then we'll burn that bridge if/when we come to it.

SPX is in a similar position as far as allowing the option for another small wave up, but a bit less cut and dried regarding its upside line in the sand.

In conclusion, bears have everything they need here, and the market has worked off much of the bear sentiment from last year, so a bear move would come as a "shock" to the majority again, which is ideal.  Now all bears have to do is keep holding the blue (C) high on NYA.  Trade safe.

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