SPX and INDU: Market Teetering in Inflection Zone

SPX made another new high since last update (not unexpected) and -- after months of "no change, trend is still up" updates -- it's finally getting squirrely out there again.  For starters, SPX ran further into the target zone (also not unexpected) -- but it's thinking about whipsawing red.  If it can't get back above red fairly directly, that could suggest a trip toward the upper blue line next:

Next up, yes, INDU still hints at another possible high... but I want to warn off leaning on this too heavily.  I really feel that this is just an area where -- if the market doesn't stabilize quickly -- bulls need to be more cautious, regardless of near-term patterns, because things could get out of hand fast.

What I wrote above is, in part due to the following SPX chart.  We can see on this chart that with the advent of Wednesday's high, we can count a possible five complete waves up off this year's crash low.  And given where the big picture is (first chart), that's as strong a call for caution as the charts ever give during an uptrend.

So, yes, the odds probably favor a bit more upside -- but sometimes the market works out to something like "51% odds of making a little bit more money vs. 49% odds of losing a ton of money."  And one has to be aware of when we've entered zones like that -- which we have.  

A week or two from now, maybe the market will give an "all clear" to bulls again... but they don't have one for the moment, not anymore.

In conclusion, I'd like to call back to what I wrote at the end of Monday's update:

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.