Wednesday, June 26, 2024


So, they've elected to make things interesting.  Last update, I speculated that perhaps bears would get a little respite... which they sort of did, but not as much as I'd projected.  Perhaps counterintuitively, this makes things more complicated, not less.  Let's get right into it, starting with SPX and a bear case:

Here's the forum post referenced above, along with the SPX 24-hour chart, as of ~30 minutes before market open:

So, that's at least interesting.  We'll see if SPX elects to break that near-term low, or if it instead wants to "catch up" to futures and run up to that level, too.  And if it then feels it's done making lows entirely and feels that little new low it made was enough to satisfy my prior instinct (on Monday) that another near-term low was still out there.

Also of interest, INDU shows that in the event things did go bearishly for SPX, then there could be some room to run.

Finally, let's talk about the bull case.  COMPQ reached my unofficial target zone (my "unofficial" targets are those I often scribble on the charts based on experience and instinct, but don't call out beyond that, because I have no concrete math to back them up.).  I added the lower "IV?" to this chart as of today:

So we can see on COMPQ that the decline reached an inflection zone and bounced, so that does give bulls the option to take over.

In conclusion, futures behaved as I suspected they would, but the fact that cash hasn't (yet?) pushes everything into an area that's much less comfortable, analytically, because the number of near-term options has increased significantly.  I tend to want to continue to lean very, very slightly toward the bears over the coming sessions, but we'll take it as it comes.  Trade safe.

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