SPX Update: Asymmetric Information Conditions

SPX made a new high as anticipated in the last update, but this area is turning into a congestion zone (unless and until SPX breaks out or breaks down).  Because of this (and because of the micro pattern), we do have one meaningful change to focus on in this update:  The lower blue channel boundary can no longer be relied upon as a reliable pivot.  This is due to the potential that the market MAY be in the process of forming an expanded flat (it may not, but it's a live possibility, so we have to treat it as such):

In the event of an expanded flat, the black line above would be a reasonable zone to watch for support.  Of course, I can't promise we're in an expanded flat, but if the market were to decline from here, there would be questions about whether the all-time high is a b-wave.

Bigger picture, we're still below resistance on COMPQ (see last update -- no need to keep reprinting the same chart over and over), so this is still a long-term inflection zone and could ultimately resolve either way.  If it does ultimately resolve lower, the potential of 5 waves at higher degree mean it could resolve lower in a big way (not "immediately" as in tomorrow or anything, but over the next few weeks and months).

But it's still too early to say what the market is going to choose here, so we'll just keep watching and waiting for more clues.  Just be aware that another option is it could keep "congesting" in this zone for a while, burning through the last of the buyers -- and THEN turn into a decent bearish move.  Or it could break out and give an all-clear.  Ultimately, the "all clear" might be a more direct and obvious signal if it happens (it will rally over resistance and we'll be able to treat resistance as key support for stops) --  whereas if the bears take over, the market could be down 300 or 400 points before that becomes clear. 

In other words, the clarity of outcome isn’t equally distributed across possible futures -- so there's an asymmetric "future information state" at play here, and that's worth weighing into your decisions.  Trade safe.