SPX and Warren Buffett Updates

Last week was an exciting week, with not one but TWO updates that allowed me to say something other than "no change."  We had not only the exciting development of a new near-term channel, but also the long-term extended fifth target from March of 2024 was captured.

Since then, the market has done as expected, though, so today I had to scrape the bottom of the barrel for something interesting, and I came up with the Buffett Indicator (below).  This indicator offers savvy diners advanced notice when the buffet is about to run out of cheesecake.  Or wait, I'm thinking of the Buffet Indicator (sorry!) -- this indicator is named after that famous "oracle of Omaha": Sizzler Buffett.

So we can see this indicator has failed spectacularly a few times, but it did manage to catch the dot-com bubble and the the 2022ish bear market. 

And it is at least of some interest that this indicator seems to be making a new all-time-high concurrent with the extended fifth target capture.  In other words, it might be worth it for bulls to give some consideration to protecting themselves here.  We also have a crazy week of data and Fed machinations coming up this week, so that, combined with the charts, might also generate some volatility.

Next up, the blue channel in SPX remains the zone bulls need to hold for the near-term, but do note that SPX has reached the median of that channel, which can sometimes offer resistance:

In conclusion, while NYA does continue to suggest there's probably still one more 4/5 unwind higher needed, this is a terrible place to become complacent.  For one, SPX captured its "textbook" crazy extended fifth target, so it could wrap up this wave whenever it wants.  For another, that 4/5 unwind isn't guaranteed, of course.  So it's a bit like saying, "I can probably jump across this 80' deep ravine without any trouble."  Sure, you probably can... but just in case the far edge gives way when you land on it, what's your backup plan?  

Trade safe.