SPX Update: A Touch of Grey

Last update ended with:

In conclusion, the first chart notes that the rally is finally showing some signs of... I don't want to say "exhaustion" just yet, but certainly some lethargy.  That said, there's no distinct pattern we can point at as a slam-dunk example of this, but we've seen a lot of overlap and little progress recently -- and that can sometimes be a warning sign.  So bulls should at least keep on their eyes open here. 

And that turned out to be understated but very much correct.  For the record, it's written as it is (with the ellipsis hanging as a marker of where I overrode my first instinct) because the word I originally wanted to use was in fact "exhaustion."  But I stopped myself because I couldn't justify that logically since there was nothing concrete in the chart that I could point at.  So it would have been "because I say so" (or "because I sense a disturbance in the Force"), which is kind of hard for even me to get behind.

Anyway, I regret not going with my first instinct, but at least I was able to provide an extremely timely, if understated, warning to bulls.

As to where we are now -- well, the market is into that lovely no-man's land between old, largely irrelevant (from an Elliott perspective) support and the actual meaningful support zone (black):

It is quite interesting that black support on the chart above roughly lines up with the next important very long term support zone (below):

So let's cut to the chase here:  In another market (meaning: a real, normal market), I'd probably think more downside.  In this market, though?  I prefer to wait to see what happens at the key levels before pushing out onto any limbs.  Because the bottom line is, from a technical Elliott wave perspective, nothing has happened yet and this could just be a particularly violent fourth wave.  Even from a standard TA perspective, this could just turn out to be an expected test of old long-term resistance (second chart) before the market moves higher again.  In other words:  While this could turn into something more significant, it's tempting but simply premature to assume that will happen just yet.  Let's first see how the market handles the levels that actually matter.  Trade safe.