SPX, INDU, COMPQ: The Thin Blue Line Between Correction and Bull

Last update talked about the need for bulls not to give too much more ground.  Let's take a deeper dive into that, because it's a bit layered.

On one layer, we have SPX, which is just going to start to look... not great if bulls let the market fall too much farther below its prior swing low.  This is because of the potential bearish 1-2 nest -- but we'll look at some more nuance in the charts that follow.

Next, let's look at some "no interpretation needed" charts.  INDU is the old standby here, and it's still above its key support levels:

Next, COMPQ's near-term chart.  There's not a lot to say about this chart that hasn't already been said to death, but there's more to discuss about COMPQ in the chart that follows this one:

The COMPQ chart that really matters it the one below, for reasons outlined on the chart:

On the COMPQ chart above, we can see that in 2024, COMPQ cracked the blue line for a minute, but recovered it quickly.  The more important observation is that every other time COMPQ sustained trade south of blue, a larger correction followed.  Which means, that's the clearest line we've got for COMPQ.  Nothing that happens ABOVE blue is anything other than noise.  If COMPQ sustains trade below it, though, we probably have to assume -- based on three prior events -- that a larger correction is underway.  Trade safe.