SPX and INDU: Nothing Doing

Last update noted that the market was showing some early warning signs of potential weakness and SPX drifted about 35 points lower since then -- while INDU has remained stuck below key resistance, as it has for a week and a half now:

Of minor mention: I drew a new uptrend line after SPX broke the green channel, and SPX has now broken that, too:

Given the market hasn't really gone anywhere, there's just nothing new to add to the prior update.  In short: bears still have a chance to turn things, but as of this moment, don't have any clear impulsive declines to confirm that's anything more than a "chance" yet.  

Near-term, it's worth being alert to the potential of a more complex (very near-term) flat, which could play out as a drop into the 7010-38 zone, followed by a bounce back to new highs... so, in the event the market declines from here, that would be the first inflection zone.  Trade safe.

SPX and INDU: A Nuanced Moment

We're probably into "last call for bears" on the bigger, more complex expanded flat down toward 6300.  I wouldn't count them out just yet, but we do need to see an impulsive decline before getting too excited about that idea:

Despite the new high in SPX, INDU failed to follow suit:

This failure in INDU gives bears (ironically, perhaps) more hope than they had at the close of last week.  So we're seeing a few signs of POTENTIAL weakness, but need a little nuance here: bears can't get too excited without so much as an impulsive decline to their names -- yet, due to the behavior in INDU and NYA (not shown) I do think we should keep a close eye on the potential complex flat as a live possibility unless/until bulls right the ship.  Trade safe.

SPX and INDU: Market Tries to Throw Curveball, Fails

Last update noted the expanded flat in SPX could get more complex, and it did.  This was the market's attempt at a tricky curveball, but we were ready for it.

On the chart above, the most likely scenario is, of course another new ATH -- and in fact, futures have already made a new ATH.  And because of the pattern in ES, I'm inclined to think that even if SPX broke down below black C immediately, it might just be a WXY.  So the first target (in the event of a breakdown at the C-wave low prior to a new ATH) would be 100 points down from the prevailing high (i.e.- if SPX opened at 7138 then reversed immediately and broke the C-wave low, our first target and inflection zone would be 7038).

That said, in that scenario, I can't entirely rule out the alt. 1 count, but my first lean would be as described above.

Intermediate term, SPX finally broke the green melt-up channel, which is a shame because it was such an easy channel to trade.  The break doesn't indicate anything bearish as of yet, it just puts bulls on notice to pay closer attention.  The steep upsloping black trendline is now the new line to watch.  The slightly upsloping blue line is probably our best current pivot for "big complex flat possible vs. unlikely."

Last INDU update noted that INDU had reached resistance, which could cause a pause, and it did:

Finally, just a reminder the if SPX holds this look through the end of the month, it's going to look bullish:

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

SPX Update: Things to Watch

The market finally gave a little bit of its recent gains back, but so far has held the melt-up channel, closing right on the lower boundary:

Near-term, there are three main options:

Basically, if SPX bounces (open suggests it will) but FAILS to reclaim the red B/2 high (second chart), then reverses and sustains a breakdown below the C/(i) low (which will also break the melt-up channel), bulls should probably get very cautious.  A sustained breakdown there would not only open up the possibility of a decline toward the 6800s, it would open up the possibility of the BIG expanded flat on the first chart that takes us back below 6300.

If none of that happens and SPX goes on to make a new high, bulls could be okay (for as long as that lasts), but should still stay alert for future breaks of the green melt-up channel.  Trade safe.

SPX and INDU: The Value of Melt-Up Channels

SPX continued its insane rally on Friday, although futures are indicated a minor gap down for Monday's open.  Just like last time, that gap down won't mean anything unless bears can sustain a breakdown of the green melt-up channel.

Note that SPX has rallied more than 300 points since I first drew that channel.  That's the value of using channels like this -- you avoid exiting longs too early and you don't even consider shorts when the market is inside an obvious channel (just like you don't consider longs when the market is still inside a crash channel).  

Longer-term, we're still about 10 days out from the end of the month, but it's worth considering (granted: early and things could still change) that if this monthly candle holds, it would be a bullish signal:

Finally, INDU has now rallied from my green target all the way back up to blue resistance:

In conclusion, there is some resistance at Friday's high (blue line on INDU, top of the green channel in SPX), so bears at least have a chance to do something with that... however, as long as SPX holds the melt-up channel, that has to be given precedence and we'll just have to see how it shakes out.  Trade safe.

SPX and COMPQ: Trusting Charts While the World Burns

So SPX made it official with a new all-time high -- finally 100%-without-a-doubt confirming the expanded flat count from December 8, 2025. Worth mentioning that I never sketched even a single "alternate" bear count during the scary decline phase.  I did note that bear options couldn't be ruled out (nothing can ever be completely "ruled out" in the market), but I stuck to that expanded flat projection from start to finish -- which is easier said than done when the world is on fire and everyone is panicking.  But I've done this for so long that I trust the charts over the news.

SPX reached the "?" on the chart, but as I noted last update, countertrend trading here would be like "stepping in front of a freight train" and that remains true for now:

A couple interesting charts that are worth reviewing, starting with this one (worth rereading the old annotation from 6/13/26):

Next, just a reminder that the ~9000 SPX target remains LIVE until proven otherwise:

Finally, COMPQ also made a new all-time-high:

In conclusion, what we need to know at this stage is that the more complex flat on the first chart remains "possible" for now, but the market has, as of yet, given NO SIGN that it's "probable."  We would want to see an impulsive decline and a sustained breakdown of the melt-up channel as first steps.  Otherwise, the trend is our friend, as the upside potential remains enormous.  Trade safe.

COMPQ and SPX: SPX Finally Fully Confirms Pattern from December

On Monday, I noted that the opening gap down could still land inside the green melt-up channel, and that if bears couldn't break down below that channel, then the gap down wouldn't mean anything.  

They didn't even come close.

COMPQ has continued rallying and now reached a "sneaky" potential resistance zone:

In conclusion, SPX has now confirmed the expanded flat from December 8 on a technical basis, if not yet on an emotionally-satisfying basis (new highs would be more emotionally satisfying!).  It's very close and ideally will make it over, though the rally is a bit extended at this point, so we could see a pause and correction soon.  If that happens at all, it would currently be expected to be just that -- a "pause" (not the end) -- but if that develops into an impulse down, then we'll look at the implications as needed.  Trade safe.

SPX, COMPQ Updates -- plus What the Strait of Hormuz Really Means to Oil and America

There's a ton of incorrect information circulating about what the Strait of Hormuz actually means for America, and for oil markets in general. So let's clear some of that up using a series of bullet points (note: I posted this same list on X if you want a ready reference page that's easy to quote-tweet):

• The biggest destination for oil that passes through the Strait is China, followed by other major Asian importers (India, Japan, South Korea, etc.).
• For 1H25 (First Half of 2025), ~89% went to Asia.
• Only ~11% went elsewhere (Europe, USA, rest of the world).
• USA alone ≈ 2.5%
• The Strait represented only about 7% of total U.S. crude oil/condensate imports, and about 2% of overall U.S. petroleum liquids consumption.
• Most U.S. domestic production is light sweet crude (WTI being the major benchmark).
• A major reason we still import anything at all through the Strait is sour crude.
• Canada is our main source of sour (along with Mexico and other Western Hemisphere suppliers).

The U.S. is far less directly exposed than many people assume. 

In 1H25, the U.S. imported ~0.4 million b/d of crude oil and condensate through Hormuz.

The reason the U.S. still imports Gulf barrels is not because America lacks oil. It's because most U.S. domestic production is light sweet crude, while many U.S. refineries still benefit from importing medium/heavier, sour grades.

So the main U.S. risk from a Hormuz disruption is price shock, not that American refineries suddenly “run out of oil.” 

The hardest-hit buyers are in Asia, with Europe also exposed, especially through price effects.

It's worth noting that not all Mideast oil needs to pass through the Strait:

• Saudi East-West Pipeline (Petroline): Design capacity expanded to 7 million bpd. Reports from March–April 2026 confirm it has been ramped up to (or near) full capacity to bypass the strait.
• UAE ADCOP (Habshan-Fujairah): Capacity 1.5 million bpd, with potential to surge toward 1.8 million bpd.  

But what about fertilizer?

U.S. nitrogen fertilizer production is heavily tied to domestic natural gas via the Haber-Bosch process, and the U.S. produces most of the nitrogen fertilizer it uses. But globally, a Hormuz disruption could still drive up LNG prices, squeeze ammonia and urea exports, and raise fertilizer and food costs, especially for import-dependent countries. The bigger risk is not that the U.S. “runs out” of fertilizer, but that the rest of the world faces another input-cost shock -- and that could bleed back to us through the global economy.

U.S. sectors that could do well in the event of a prolonged closure include LNG, oil, agriculture, and fertilizer exports.

The downsides are more obvious -- but it seems everyone is talking about those (real or imagined), so I don't feel the need to rehash all that in great detail here.  Just sign onto X for five minutes and you'll see people predicting everything from "global depression" to "energy crisis" and more (for the record, I don't see this leading to a U.S. energy crisis -- we have too much domestic oil and the government always has "export bans" as a card of last resort if it ever came to it. High import nations are another matter and could very well face localized energy crises.).  But a few of the more likely "negatives" that come to mind are: consumer inflation (higher gas, heating, diesel, etc.), potential global demand destruction, and the fact that while the U.S. is very well insulated, it is not "100%" insulated, so some short-term pain wouldn't be out of the question.

Market-wise, not much happened on Friday, but futures are indicating a minor gap down this morning, though about half of the opening futures gap has already been recovered.

The opening gap may still land within the green melt-up channel, so bears will need to keep pushing to turn it into anything.

COMPQ is still above its intermediate lines:

And finally, SPX bounced solidly off its intermediate trend line:

Not much else to add beyond that.  Trade safe.

SPX, COMPQ, INDU: Charts Lead the News, Part #2,785 of ∞

Since last update, SPX has continued melting up higher.  It's interesting to consider that the C-wave target went on our radar several weeks before Christmas, long before the war in Iran, long before the "ceasefire," long before anything in the current news cycle... and it seems to have predicted all of it with uncanny precision.  This is why I've long argued that charts lead the news (and its corollary: news is noise).  This is also why I never joined in on all the panic -- the charts never gave us a clear reason to panic.

Now, what would be most interesting here -- and I'd be tempted to say I might even lean this way if it weren't unpredictable (corrections aren't impulses, so they have higher variance) -- would be this:

[yes, there's a typo on that chart: an extra "make" -- I'll fix it next update]

Again, I'm not predicting that's what will happen, because nobody can make that prediction here.  But it is a technical possibility, and maybe one with higher odds than normal in circumstances such as these... so we'll keep an eye on it.

Next up, INDU has bounced like a superball off its green target, after capturing it right on the nose:

Finally, COMPQ is above its key resistance, for now:

In conclusion, bulls are within spitting distance of completing this pattern -- of course, we can't just assume they will, there's always the possibility of something like a WXY (with C being the bottom of W) -- and they still have another minor black line and red to clear -- but they really can't complain about their position.  

Frankly, even if they never make it, the fact that the C-wave inflection zone worked as well as it did -- alerting us months in advance that a tradeable bottom was a reasonable probability in that zone -- is a huge win either way.  Trade safe.

SPX, COMPQ, OIL -- and a Rant on Cognitive Bias

Humans have a persistent, predictable bias: we overweight outcomes we can see and underweight outcomes we can’t. The reason is obvious: immediate, visible consequences feel real, while distant, abstract consequences do not.

That is why people still smoke, eat badly, skip exercise, and ignore slow-building risks in general. They may “know” there are consequences in some abstract sense, but without immediate feedback, those consequences are easy to discount.

This bias also helps explain why politics is so dysfunctional. Many serious problems develop slowly, remain mostly invisible until late in the game, and impose no obvious pain in the present. 

Social Security is one example: we’ve known for decades that its finances are structurally strained, yet meaningful reform keeps getting deferred because the problem still feels distant to most people. Most likely, because of our cognitive bias, nothing will be done until the 11th hour.

Imagine these two scenarios:

In the first, you walk into your bedroom, see a bomb, call the bomb squad, and they disarm it. You’re incredibly grateful. 

In the second, armed men kick in your door at 1 a.m., drag your family out of the house, terrify your children, damage your property, and leave without explanation. You’re furious. 

You carry a grudge against these men for years. Until one day, you finally learn the truth: There was a bomb under your bed and they saved your family.

That is the problem with prevention: when the danger is invisible but the intervention is visible, people often resent the rescue. Preventing a disaster no one saw and that never happened rarely earns gratitude. Worse, if the preventive action is disruptive enough, it can even make the rescuer look like the villain.

Which means there's an asymmetrical social and political payoff for waiting until things are dire. 

Politicians are rewarded for managing visible pain and punished for imposing visible costs to prevent abstract future pain.

For that reason, politicians are incentivized not merely to ignore future problems, but to avoid taking painful, visible action against risks the public still experiences as abstract. 

So it’s always worth considering what kind of political behavior we, the electorate, are actually rewarding. If we punish prevention and reward delayed reaction, then we should stop acting surprised when politicians wait until after the fire's already raging.

*****

Market wise, bulls obviously aren't entirely out of the woods yet, but it's looking increasingly likely that wave C of the expanded flat we've been tracking since December 8, 2025 has indeed bottomed.

There's another option not discussed on that chart, which would be that the last bottom was a larger B-wave -- which would see a rally back to the all-time high and then yet another return to recent lows.  I'll cover that in more detail if it becomes appropriate, but there's the head's up.

COMPQ is likely going to shoot back above its resistance zones at the open.  Bulls will, of course, need to sustain that breakout:

Finally, I hinted at this possibility in oil in the prior update, but I think I've talked myself into very slightly favoring it.  The last low has been bothering me, because it just doesn't look like any sort of C-wave -- it's looks corrective, like the b-wave I've labeled below.  This would mean the spike wave wave c of an expanded flat to complete the larger b-wave.  Note that this count, if correct, could indicate another year (or even many years, if the blue abc is just wave A of an even larger flat!) of low oil prices.  So I thought it was worth warning about this now:

In conclusion, bulls are doing what they needed to do and the C-wave low is looking more likely.  Bears do still have a couple of "last lines of defense," but they'll need to make a convincing and fairly immediate stand to undo the damage they're going to take at the open.  Trade safe.

SPX and COMPQ: A Fair Number of Marbles

Interesting times.  Not a ton to add since last update, but SPX has made some progress, clearing the falling black trendline.  Red remains its next hurdle:

COMPQ is back-testing its intermediate and long-term trend lines:

In conclusion, there are a fair number of market marbles riding on these tests.  If SPX and COMPQ can sustain breakouts back over resistance, there's a good chance the decline is over.  If they're rejected at these back-tests, then the market would be signaling that bears are, at least for the moment, waking up.  Trade safe.

SPX, INDU, COMPQ: What Bulls Need to Do Next

Last update noted it would be okay if SPX fell back into its target zone again as long as it didn't sustain trade below it.  While it did trade briefly below it, it then bounced immediately.  The question now is whether this is finally a lasting bottom, so let's outline what bulls would need to do to signal that.

The first near-term goal is for SPX to sustain trade north of the falling black trend channel:

Looking at it from the other direction, bears still want to see sustained trade below blue:

INDU is also bouncing off its target:

COMPQ is in a kind of no-man's land.  Here, bulls need to get back above the three broken trend lines:

In conclusion, SPX and INDU captured their targets and bounced... but so far, SPX has only rallied back up to resistance.  It needs to clear black first, for bulls to signal they mean a bit more business.  If it can do that, then it will likely head toward next resistance: the upper red channel boundary (first chart).  If it can't, clear its resistance zones, then the extended C target will remain on the table.  Trade safe.

SPX and INDU Capture First Targets

Since last update, SPX and INDU both captured their targets, literally on the nose.  Let's start with INDU:

SPX's "textbook target" was 6356.  Friday's low was 6356.08.

As of this moment, futures are indicating a gap up, so the market is clearly acknowledging 6356 as more than just a random number.  

Now the caveats: a bounce at a key zone doesn't always mean the final low is in at that zone (the market often reacts to key zones, but not always "permanently").  The SPX chart outlines what bulls need to do next -- basically, they need to start getting back above the broken trend lines and the black channel.  

It's okay for SPX to fall back into the target zone again, but if it sustains trade below that zone, then the extended C target goes on the radar... and just be aware that if it were to sustain trade below the lower boundary of the black channel (SPX chart), it could be in real trouble.  Trade safe.

SPX, INDU, COMPQ: An Old Log Chart Worth Viewing

Since last update, SPX has faded back to the "Trump Tweet Lows" and is testing the zone around those this morning.  COMPQ has faded as well.  Let's get right into the SPX near-term chart:

On SPX's longer term log chart, we can see older support sitting just a bit below current levels.  This roughly lines up with the C-wave target above:

COMPQ is still in the "maybe it can find a whipsaw" zone, but nothing bullish has happened there yet:

INDU is likewise just above support:

In conclusion, the market has continued drifting lower and is now back to testing its last low.  There is potential longer-term support not far below that, and the first C-wave target.  Whether bulls can do anything with any of that -- or if bears are here to stay for a while (keep in mind the "worst case" INDU bear chart published previously, which would see a serious decline) -- remains to be seen.  Trade safe.  

SPX, INDU, COMPQ, GOLD: Don't Hatch Your Chickens Before They're Counted

First up: the forums are back up.  Note that if you have trouble there, then you may need to clear your browser cache.

So the main thing that's happened since last update is: "nothing."  The market is still in basically the same place.  But that's not insignificant here.  Because it means the downward momentum has stalled for the time being -- after reaching targets in some markets and nearly reaching targets in others.  As long-time readers know, the areas near target zones represent inflection zones.  

SPX illustrates the next steps for bulls... and a test of upper red looks slightly better than 50% likely at this moment.  Then if bulls can breakout there, it could be back to the black lines... and maybe back up to new highs.  So bears probably shouldn't count their chickens just yet.

COMPQ is still below its first key support, but hasn't declared which way it wants to go yet and could still whipsaw:

INDU is in a similar boat to SPX, with the added benefit of having had futures capture its target:

Finally, Gold just did an interesting test of a trend line that's been on this chart for a while -- and so far, that held as support.

In conclusion, Monday's update's conclusion still hold:

The question at the moment is whether Trump's tweet is going to be enough to stick save this thing here -- and "here" happens to be at or near first targets, so that's not out of the question.  The first positive sign for bulls would be sustained trade north of ~6700, and ideally a breakout over the upper red boundary on the SPX chart.  The "positive" sign for bears would be SPX giving back everything futures just gained and COMPQ sustaining trade south of Friday's low.  The COMPQ chart suggests that if that occurs, we could see the selling continue, possibly leading the market another 5-10% lower, if not more.

Trade safe.

SPX, COMPQ, INDU: Stick Save or Bust

First up, the forums are STILL down -- after much back and forth and gnashing of teeth, it appears the problem is on my host's end, so now we're waiting for them to sort out their server Apache handlers.  In the meantime, I'll post to X a bit: Pretzel Logic

Market-wise, last update said: 

The thing about this wave is *if* it's a C-wave decline, it should be a clean motive wave -- either a standard impulse down or a diagonal.  Right now, it isn't clearly either of those things.  That may suggest it's still incomplete.

And SPX then made new lows -- so it was, indeed, incomplete.

But the market is having an interesting moment now: after drifting downward early, Trump tweeted that he was in positive negotiations with Iran and futures shot up ~230 points in six minutes. Whether that's enough to mark a bottom or not is anyone's guess.  COMPQ suggests bulls probably need it to be.  If futures give all those gains right back, beware.  COMPQ's prior behavior around this trend line suggests bulls can't tolerate being below it for long without more selling hitting the tape.

SPX futures took it closer to its textbook target in the overnight, but didn't quite reach it.

INDU futures basically did reach its target in the overnight.

In conclusion, the question at the moment is whether Trump's tweet is going to be enough to stick save this thing here -- and "here" happens to be at or near first targets, so that's not out of the question.  The first positive sign for bulls would be sustained trade north of ~6700, and ideally a breakout over the upper red boundary on the SPX chart.  The "positive" sign for bears would be SPX giving back everything futures just gained and COMPQ sustaining trade south of Friday's low.  The COMPQ chart suggests that if that occurs, we could see the selling continue, possibly leading the market another 5-10% lower, if not more.  Trade safe.

OIL, SPX, COMPQ, INDU: What Are We Even Looking At Here

Okay, let's lead with a new chart today:

The thing about this wave is *if* it's a C-wave decline, it should be a clean motive wave -- either a standard impulse down or a diagonal.  Right now, it isn't clearly either of those things.  That may suggest it's still incomplete.

Bigger picture, SPX remains above long-term support.  As always, some whipping around that level is okay (that's just what markets do) -- it's a sustained breakdown that bulls should worry about:

INDU has gotten close to its downside target:

Bigger picture, there are enough waves for a complete Supercycle 5 if it wants:

COMPQ is still above its long-term support zone:

And finally, a number of readers have asked for an update on the legacy oil chart (the same chart since 2011, which has caught every major move in oil for the past 15 years).  At this point, basically the hope for oil BEARS is that the wave labeled "2?" is actually a b-wave low (which would need to be revisited).  If it's not a b-wave low, then we may have just begun Primary Wave 3 up, which will be a long and scary wave that takes oil into the stratosphere (~249 target).  That might pair well with the end up Supercycle 5 in equities... hard to imagine the economy booming with oil above $200 a barrel.  

Worth keeping in mind.

In conclusion, equities are holding their long-term support zones for now, but I do again want to stress that -- IF this is a bear wave -- it's the type of wave that moves "gradually, then all at once."  So -- again, IF this is the start of a bear wave -- then at some point it will just let go, and there won't be many good exits in the future.  Because of the overlapping nature of the wave so far and the unclean high, I don't think there's an easy answer to that question right at this moment.  

Trade safe.

p.s.- the forums are currently down.  IT is working on this and they will hopefully be back up this weekend.