SPX Update: So Far, Just More of the Same

Not much has happened in terms of price since last update, but SPX has continued holding its key near-term support zones, which is bullish as long as it continues:

Intermediate term:

And long-term:

In conclusion, to reiterate my longer-term stance since September:  As long as SPX continues holding the breakout over blue and black in the long-term chart (final chart), there's just nothing for bears to get excited about, and the trend remains up.  For perspective, the ~9000 SPX target remains live as long as that breakout holds.  Trade safe.

SPX Update: Between a Rock and a Soft Place

The market's done essentially nothing since last update, so it's about time for my ~monthly reminder about the chart note (I don't even need to update the October annotation) from September:

Near-term, for smoothest sailing, bulls would like to continue holding above blue:

But really, the red line on this next chart is probably a bit more significant than the blue line on that near-term chart, though they're not too far apart:

So those are the near-term support zones -- meanwhile, what stalled the market here is the line that I called out last update:

In conclusion, SPX is paused between old long-term resistance and near-term support, so we'll see who blinks first.  Trade safe.

SPX, NYA, and SPX's Post-Thanksgiving History Back to 1930

Let's start with an interesting chart, which will be a big hit with bulls.  Going back to 1930, this past week marked the 16th time SPX had a +2% Thanksgiving week.  The 13 month performance following +2% Thanksgiving weeks has been positive in all 15 prior cases -- with the average thirteen-month gain being 22.9%:

Next, SPX has continued to rally since I issued warning on November 21 that the decline "may be done or nearly done":

NYA has technically (if not officially) confirmed the pattern as interpreted on November 14:

SPX is back into (old) red, but hasn't tested that yet:

Finally, the chart below is worth bringing forward for two reasons:

In conclusion, the market has reached a potential resistance zone, so it may react to that.  Long term, if history is any guide, we might need to continue keeping the "fifth wave extension of a fifth wave extension" option in mind for the time being, but we'll see how things develop from here.  Trade safe.

SPX and NYA: NYA Captures Upside Target

Last Friday, I noted that SPX had captured its first downside target, while NYA came very close to its target.  I also noted that it appeared to be an ending diagonal and that it was probably done or close to it.  Whether SPX follows through to retest the ATH or not -- we do at least know now for certain that those warnings marked a tradeable bottom:

We can see above that SPX has broken out from the diagonal boundaries, which is a good sign for bulls -- but bigger picture, it's facing the old red trend channel (which it looks likely to clear -- the test will be whether it can hold that):

NYA has captured the upside targets I provided on Monday:

In conclusion, bulls shouldn't get complacent -- but so far, SPX is performing in line with the expanded flat I've been tracking since November 14.  Be aware that the bear side of the coin would be that the recent bottom was the A/1 low with the current bounce being B/2.  I'm still assigning that lower odds, but it was a very weird pattern heading in to the ATH (as I noted in real time), so it's not something I can rule out.  

On another note, Happy Thanksgiving to everyone!  As is the 14-year tradition, there'll be no update on Black Friday's short session and the updates will return on Monday.  Hope everyone has a pleasant holiday -- in the meantime, trade safe.

SPX and NYA: Better Nate than Lever

This is the start of Thanksgiving week and traditionally, this is one of the most bullish weeks of the year on a seasonal basis -- so that's worth keeping in mind.

Last update discussed the possibility that the decline had done its job and completed or nearly completed, and the market did manage to hold the recent lows during Friday's session.  It has not yet broken out of its near-term downtrend, though, so that's the next test for bulls:

In SPX, I probably should have mentioned this (see chart annotation) in the prior update but forgot -- and "better Nate than lever" as the old Dad joke goes:

Bigger picture, the zone around black still appears to be the next reasonably significant downside price point:

In conclusion, it's worth reiterating the close from Wednesday's update, because for now, it remains the most germane feature of this market:

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of a seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

Not much to add beyond that.  Trade safe.

SPX and NYA: SPX Captures First Target

Last update argued that 

"Near-term, the Occam's Razor chart interpretation suggest further lows will occur."

and closed with: "Near term the decline probably isn't done yet."

And that proved to be a big hit.  SPX captured its first downside target -- and NYA came very close to capturing its target as well:

Let's look at what is currently my (slightly) leading interpretation for SPX, based on the apparent 3-wave nature of the most recent all-time highs.

Bigger picture, the diagonal invalidation is below the black trend line, so that keeps things reasonable:

Essentially, if I were a bull, I would be VERY cautious in the event the diagonal's KO (2nd chart) is overlapped more than briefly.  Yes, there are always other iterations of a diagonal to be drawn, but this is an imperfect world and sustained overlap there would be a classic big warning sign.

To quote what I wrote in the prior update (note that we got the new lows already -- this is more for the remaining sentences beyond that point):

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of a seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

So, in conclusion, most markets would look better with new lows -- so near term the decline probably isn't done yet.  And, even if it is part of a corrective wave -- which is currently the most likely potential, but never a "guarantee," especially coming at the tail of a possibly-complete 5 wave rally (as mentioned above); again, this does make this less certain than our usual b-wave highs -- expanded flat c-waves can sometimes extend far beyond typical targets, so this isn't a great time to be complacent if you're a bull. 

I couldn't have said it better myself.  Trade safe.

SPX and NYA: Bull Case/Bear Case

There wasn't much to add last update, but I did note:

Near-term, SPX is still holding the recent swing low, though it did dip below red again -- which can sometimes be a sign that buyers are running a little thinner, so bulls should stay on their toes here.

That warning proved appropriate, and SPX has since gone on to break its recent swing low and close below the all-powerful red trend channel:

Near-term, the Occam's Razor chart interpretation suggest further lows will occur:

So I'm going to outline the bear case here, and then the counterargument.  The bear case is pretty simple and can be seen in the blue 1-2-3-4 on the first chart, suggesting the potential that the ATH completed wave 5 of that count.

The bull case is also simple, and is best illustrated by NYA's chart:

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of an seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

So, in conclusion, most markets would look better with new lows -- so near term the decline probably isn't done yet.  And, even if it is part of a corrective wave -- which is currently the most likely potential, but never a "guarantee," especially coming at the tail of a possibly-complete 5 wave rally (as mentioned above); again, this does make this less certain than our usual b-wave highs -- expanded flat c-waves can sometimes extend far beyond typical targets, so this isn't a great time to be complacent if you're a bull. 

Trade safe.