Friday, February 9, 2024

SPX, COMPQ, INDU: The Lower Edge of an Inflection Zone

Last update discussed that the market likely needed a few more highs before it could enter an inflection zone, and if the gap up in futures sticks, we'll be getting into that zone today.

That said, keep in mind that this is not a "guaranteed" reversal zone, merely a potential inflection zone.  The market reserves the right to tack on extended fifths and the like if it so chooses.  For that reason, cautious bears may want to await an impulsive decline before getting too aggressive.

SPX hit the "5" target zone (from Wednesday's update) in the overnight session, but has since fallen back a bit:

Finally, INDU is now very close to the (iii) label from January.  This shows one option that could give bulls a headache, were it to play out:

In conclusion, last update's call for multiple new highs was good, but we may not know for several sessions yet whether bears can do anything with this inflection zone.  Trade safe.

No comments:

Post a Comment