Friday, April 12, 2024

SPX, INDU, BKX: Bears' Ball -- for Now

Last update discussed two options for SPX, and it appears that SPX choose the first of those two options:

As discussed on Wednesday, both of those options were ultimately bearish in the event of a break of 5146 -- which means that the "bounce" option was corrective.  Which in turn means that it (the bounce) doesn't need to reach the 5230 threshold -- since corrective waves are not bound by rules, targets can be simply described as "most commonly, here's what happens," but being against the larger trend, corrections can (and often do) fall short.

So, presuming bears hold 5257, we may be witnessing a change of trend that's going to last for more than a minute.  The bull option is that this will go on to form a larger fourth wave (still likely to be of decent size and duration), and then go on to a last hurrah.  Perhaps this is best illustrated by INDU -- though please keep in mind that the fourth wave as drawn on that chart is highly speculative and has been on there since January, so its potential targets will need to be updated as things develop.

The most bearish option is that the last hurrah is already over, as best illustrated by BKX:

In conclusion, Wednesday's break of 5146 is technically significant and implies we may be looking at a developing bear nest, which will lead to a stronger sell-off.  There are still other, undiscussed, bull options, but the first thing bulls would need to do to give those more consideration would be to break above 5257.  Assuming that doesn't happen, then the "Occam's Razor" interpretation is that bears may have the ball for a bit.  

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