SPX and INDU: Three Hits in a Row -- Now it Gets Tough Again

Today's Question of the Day comes from long-time reader Hubert "the Hammer" Spankle, who writes:

Dear Mr. Logic,

Is this market insane? Or what?

Sincerely,

Hubert "the Hammer" Spankle

Well Hubert, I think you've hit the nail on the head (hence the nickname?) -- and many traders are, in fact, wondering the exact same thing.  The short answer is: yes.  Yes it is.

One of the best charts we've had during the past couple weeks of insanity is INDU, which has helped keep us sane -- by keeping us looking the correct near-term direction.  

But INDU's chart has now potentially completed what it needed to and isn't offering any further hints -- as of this exact moment, anyway.  In the event it sustains trade at a new low, that could actually kick off a decent decline (as that would, presumably, be wave 3 down of a larger 3 or C down), which would likely take us down toward ~50k or below.  More details on the chart:

Moving on to SPX, there are no less than 2,896.5 potentially valid near-term patterns at this exact juncture... but the more complex triangle is still very much in the running, largely because the last two legs down have been very start-stoppish (not a word), which is inconsistent with typical impulsive declines.  Not impossible, of course, but inconsistent.  The chart below discusses this in more detail (triangles can be ugly, so this is intended for over 18 only. NSFW.):

The more immediately bearish option (not shown) would be that this week's low is a b-wave, and new lows will be forthcoming as soon as the c-wave bounce completes.

The more bullish option (not shown) would be that we just lived through a rare RUNNING flat (where the wave C decline fails to break the wave A low) and the decline is entirely over, with SPX headed to a new all-time high.

That's about all the news that's fit to print at the moment.  Trade safe.