Sunday, October 22, 2023

SPX, COMPQ, Gold: Friday's Update was a Hit

Friday's update concluded with:

Incidentally, if today begins with a little bounce back up over 76, then there's a reasonable chance that the overnight low is a corrective b-wave -- meaning the overnight futures low would be revisited and broken soon after (the overnight low sits down near ~4253 cash equivalent, though this isn't an exact equivalent, so allow a little leeway).

Friday's market found support 3 minutes after the open and bounced up to 76.56, then reversed and dropped below 4253, fulfilling the prediction quoted above.  It eventually dropped all the way down to 4223 near the close, so hopefully that was helpful to readers.

Friday's close is into the zone that constitutes a retest of the prior swing low ("retests" are never to the penny and are plus/minus zones above and below prior lows (or highs)), so we'll see if bulls can muster any sort of bounce from this zone.  Keep in mind that the complex 4th wave discussed previously stays on the table plus and minus the current zone:

COMPQ is also testing its low:

I did want to mention that Gold did not sustain a breakdown at its key trend line, and as long as that continues, it will avoid the option of the blue path.  The next step for gold bulls would be to attempt to decisively clear the zone around the last three highs.

Finally, the very-long-term chart of SPX remains interesting:

In conclusion, the market traveled, without incident, from the blue 4 inflection all the way down to the zone where it will enter the upper portion of the inflection for a more complex blue 4.  I'm not crazy about the idea of a complex fourth, because I think it's too easy on bulls, who ideally should be trapped now -- but it's always possible.  How the market behaves over the next week or so may determine if November 2023 becomes known as "Black November" in the future; if it goes directly into a fifth wave, there is potential here for an extended fifth (extended fifths become waterfalls).  Trade safe.

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