SPX and RUT: The Charts in More Detail

Last update I mentioned that, due to the expanded flat I spotted in ES, I was still unwilling to commit to the bear case, and that turned out to be the right decision.  Wednesday saw SPX decline back to retest its presumed C wave low, and then bounce strongly.

This gets a little tricky now, because we are dealing with a corrective wave, and corrective waves do not need to follow the same narrow rules as motive waves -- which makes corrective waves less predictable.  We have a potentially complete correction at 2785, so the market can rally right on up past 2860 if it wants -- but it also has the option to form a complex correction if it feels the need.  Accordingly, I've outlined both options in some detail.

Let's start with RUT, as many of my readers follow and trade this index:

Moving on to SPX, we'll look at the detailed count first:

And the bigger picture chart, which is unchanged:

In conclusion, the market has done what it needed for a complete correction, but always reserves the right to form a more complex correction if it feels the need (it does complex corrections to draw out time and price, and to confuse participants).  Both options are pointed higher for the near-term, but we should approach the upside inflection point in the next session or three.  If we see an impulsive turn from that inflection zone, then we're prepared and already alert to the potential of a complex correction.  Trade safe.

SPX and INDU Updates

No resolution from the market yet.  Bottom line is bulls probably need to hold the recent lows:

INDU is presently three waves down from the high, but might suggest a bear nest on any sustained breakdown of the most recent low:

In conclusion, because of the potential expanded flat in SPX, I remain unwilling to commit to the bear case yet, but I'm not entirely closed to it, either.  The expanded flat potential is based primarily on a pattern that occurred last week in the e-mini S&P futures (ES), and sometimes ES can do screwy things due to leverage.  The bottom line is, if bulls can hold 2785, then they have a good shot at highs above 2860.  Conversely, if bears can sustain a breakdown at that zone, then it becomes "too many waves down," and the ball shifts to their court.  First potential warning sign for bulls would be a sustained breakdown of yesterday's low.  Trade safe.

SPX, NDX, INDU: Friday's Targets Captured; First Inflection Zone Reached

On Friday, I went "out on a limb" and called for an immediate 60 point reversal against Thursday's strong rally... and here we are, right at the 2800 target -- which is also an inflection zone

This is a little tricky right here, because we have some mixed signals from various markets, and while Friday kept bears in the game, the potential for an expanded flat still casts a shadow over everything.  Let's get right to the charts, starting with NDX, which has a pivot zone to watch.

NDX bigger picture bearish option is alive and well for now:

SPX closed right at its first target and inflection zone, essentially to the penny:

INDU continues to provide some hope for bears, depending on what happens today:

In conclusion, the market has reached its first inflection point.  While it's tempting to jump right into the bear camp, due to the potential for an expanded flat (i.e.- a "bear fake-out wave") I do want to see how the market reacts to this zone before doing so.  The next couple sessions should be important.  Trade safe.

SPX, INDU, NDX: Chaos on a Limb

Last update was looking for further downside, which we got... but due to yesterday's rally, the charts have been thrown into borderline chaos.  Despite that, I'll go out on a limb and make a clear call -- but I'll caveat by saying that my confidence isn't terribly high, and in the charts that follow SPX, I'll discuss why that is.

First, here's my "best guess," via SPX:

Two charts of NDX:

The second shows why, via classic TA, bears probably need a turn immediately:

Finally, INDU has opened up a few more options for itself.

In conclusion, I'd prefer to at least see a break of Wednesday's low (at least in SPX and INDU, not necessarily NDX) before too much else happens.  If bulls instead continue to sustain this breakout, then all bets are off.  Trade safe.

SPX, NDX, INDU: Bear Hope?

On March 4, I listed the potential resistance zones for SPX, and the second zone I called out was "2852ish."  Yesterday, SPX hit a high of 2852 directly on the nose, then reversed strongly.  This, combined with INDU (more on this in a moment) gives bears at least a fighting chance.

Let's get right to the charts:

NDX also stalled in its noted resistance zone:

And INDU looks like a three-wave rally -- so far.  If bulls sustain trade above yesterday's high and the February high, then all bear bets would likely be off for the very near term.  But as of this moment, it is what it is and has to be treated accordingly.

(Basically, if INDU sustains trade north of the 2/B label, then we might be dealing with those first three waves as a bull nest, i.e.- 1-2 up, i-ii up.  Until that happens, though, it looks like an ABC rally.)

In conclusion, this may be the best shot bears have had in a while.  No guarantees, but as long as bears hold the noted levels, we may see the near-term shift into their favor in the not-too-distant future.  Trade safe.

SPX and NDX Updates

The market is still flirting with resistance, which is layered higher throughout this current price zone.  I've detailed this on the NDX chart below, and presumably if NDX encounters significant resistance, then so will everything else.

Near-term, NDX bonked its head on the median channel again.  Keep in mind that if it does sustain a breakout there, it would commonly run toward the top of the channel, which is one of the reasons why we're treating the blue lines on the chart above as speculative until we see an impulsive decline:

SPX ran to a resistance zone that I outlined a couple weeks ago (on 3/4), the resistance zones noted beyond that are similar to those noted on the first NDX chart.

In conclusion, bears still have nothing definitive to sink their teeth (or claws?) into.  While the market is facing several resistance zones, we have to continue to presume the trend is up until we see an impulsive decline.  Trade safe.

SPX and NDX: Minor Inflection Point

Last update noted that "Bear C" appeared to be complete in SPX, which implied a new swing high was forthcoming, and SPX broke the prior swing high (2816) with ease during the session.  The charts also indicted resistance just beyond that level, and SPX proceeded to tag that resistance and has remained stalled since then.

On the chart above, we can see that, in the recent past anyway, this resistance zone has been fairly formidable -- SPX was rejected once here in October, twice in November, and once at the beginning of March.  The more resistance (or support) is tested, the weaker it becomes, because each time the market tests such a level, more sellers (or buyers, for support) are used up, theoretically leaving fewer participants to sell or buy that zone next time around.

NDX also tagged its noted resistance zone, and also stalled:

In conclusion, the market is testing an important resistance zone, which makes this something of an inflection point.  If bulls can power through and hold above, then they could get a new near-term lease on life.  If they can't, then we can't say the charts didn't warn of the possibility, and bears might get themselves a larger correction.  Trade safe.

SPX, NDX, INDU Updates

It appears that last update's "Bear 3/C" inflection point may have indeed marked the bottom of "Bear C."  Let's get right to the charts.

First up is SPX's bigger picture chart:

Next is a closer look:

NDX has already made a new high:

And finally INDU, which is lagging a bit, and the only hint of weakness in the market -- INDU does create at least a little bit of concern for bulls until that rectifies:

In conclusion, there is some resistance approaching, and there's always a chance for any rally to stall at resistance, so bears aren't without any chances at all for the moment (although there are as yet no impulsive turns, even at micro degree) -- however, if the market sustains a breakout there, then that will have to be respected as bullish until proven otherwise.  Trade safe.

SPX, INDU, NDX: Mixed Market

Friday's market declined right to Target 2, then meandered around most of the session before bouncing strongly into the close.  We currently have some mixed near-term signals among different markets, and Boeing looks set to drag the Dow Jones Industrial Average (INDU) into a deeply red open this morning -- while SPX has remained relatively flat.

But the signals aren't mixed for THAT reason, but due to the charts Friday's session left us.  Let's start with SPX:

While SPX has broken its first near-term downtrend line for the moment, it has yet to reach the black trend line that's currently crossing near the 2762 (and falling) zone.

INDU, on the other hand, didn't even manage to break its first trend line on Friday, and if it declines strongly off the open, that could "lock-in" a three wave corrective rally:

The NasDUCK 100 (NDX) finds itself in a similar position to INDU:

In conclusion, the market did rally off the target level (target levels often act as support/resistance zones), but it has not yet signaled the "all clear" for bulls, so we can't yet say if the decline is over or not.  (Bears, of course, are hoping "not," but that's not a given either yet -- and if the rally starts to show legs, then these apparent "three wave" structures could develop into something bullish.)  Either way, sustained trade below 2722 should take us toward 2700+/-, though if SPX throws in a complex correction, that next target might not be reached immediately.  Trade safe.

SPX and INDU: A Change of Character

We finally have a change of character in the market, much to the excitement of bears.  Last update noted some key levels, both of which proved to be valuable.  The first tell was INDU, which was rejected right at its key bull/bear line:

SPX then acted as confirmation.  When it violated its key downside level, its first target zone was reached easily during yesterday's session (I've since moved the "Bear 3/C" label):

In conclusion, we should expect further downside for the immediate future (first targets as noted above), and will be watching carefully to see if this decline develops into a larger impulse wave, or remains corrective.  Trade safe.

SPX and INDU: New Charts!

On Monday, the market did something different:  It traded as if it was open, and there were actual live people placing trades.  If you can imagine.  In honor of the market doing something different, I've drawn up a (drumroll please) NEW CHART!

And an edumacashunal chart (to further your continuing edumacashun), at that, which depicts the potential of a classic "expanded flat" pattern.  The most recent high is far from being a "clean" five wave structure (b-waves highs are corrective, not impulsive), which is one of the reasons we do have to be alert to this potential:

On the flip side, bulls do need to get back above the black trend line:

In conclusion, bears finally have an impulsive decline, BUT it's possible that's wave C of an expanded flat.  The most recent low (2767) is thus the first important dividing line.  Trade safe.

SPX Update: Still the Same... for Now

Last update noted that there still appeared to be little hope for bears, outside of a more complex short-term correction, but that even if there was such a move, it would still be expected to be "just a correction" (meaning the larger trend would remain "up") -- at least for the time being.

Nothing much has changed, and there are still no signals suggesting the rally has ended.  All of that can always change tomorrow -- the market can change character on a dime, and it usually announces that fairly clearly once the first turn happens.  But for right now, the uptrend is what it is and must continue to be respected as such.

In conclusion, nothing much to add (as usual lately!).  I did note a few potential resistance zones on the chart above, but as I've said many times, until we see a clean impulsive decline, the trend remains up.  Trade safe.

SPX Update: Witty Yet Germain Update Title Goes Here

Last update suggested that SPX might need another near-term wave down, and that wave down then materialized later in that session.  That now creates the appearance of a three-wave structure from the most recent high to the most recent low.  Three wave structures are generally corrective in nature (for example, an ABC is three waves -- and, of course, those waves are labeled as Wave A, Wave B, and Wave O, for "OMG this market!"  Wait,  I mean Waves A, B, and C, for "Crikey, this market!")

Let's take a look at the most recent SPX chart:

Ha ha, just a little technical analyst humor there, designed to elicit angry responses from the type of people who are offended by everything they read on Twitter.  (Now I just need to post this on Twitter, which I keep meaning to use but almost never do.)

Let's take a look at the real chart now, which, in many places, looks basically the same as the one above.  We can see the new blue channel has held the recent decline:

In conclusion, there appears to be a three wave structure heading down from 2813 to the most recent low, which suggests that the rally isn't over yet.  Bears could get a more complex correction, which would test the high then dip below that low, to work with, but it would likely still be "just a correction" (not a prediction, by the way, just an option to be aware of).  Trade safe.

SPX and INDU Updates

Let's get right to the charts.  First up, INDU is working against an obvious channel:

INDU closed near support, so we'll see how it reacts to that today.

SPX seems to have shifted into a new near-term channel -- the blue channel, which I drew on the chart a few days ago:

SPX MIGHT need another near-term wave down, but it's not entirely clear to me at this moment.

In conclusion, SPX has run a little past the dashed red resistance zone, but is presently back-testing that zone.  A sustained whipsaw back through the lower red line could generate a larger sell-off, if that were to occur.  If it holds the breakout, then it would be back to "business as usual."  Trade safe.

SPX: A Less Boring "Boring Update":

So far, no matter what has happened, the market has continued relentlessly higher.  This is sometimes called "bad news is good" sentiment.  In this case, not only is bad news good, but also good news is good, no news is good, news about cats is good, and news poorly translated from a foreign language is good (headline:  "Dow Rallies 500 Points on Announcement that China Will Cease Importation of Bite the Wax Tadpole."   Later correction: "Earlier, CNN erroneously labeled 'Coca-Cola' brand soft drink as 'Bite the Wax Tadpole.'  Also, the Dow rallied 7000 points, not 500.").

(Random Factoid:  I'm actually not making up "Bite the Wax Tadpole" as a bad translation for the infamous soft drink:  Coca Cola: Bite the Wax Tadpole?)

Basically, "everything is awesome."  At least as far as the market is concerned.  Which is why we haven't been getting too gung-ho on bear options.  About the most I've been willing to do in terms of bear predictions has been tepid "eh, maybe" calls, such as on Friday:

If bears can push below yesterday's low, they could get something going in terms of a larger correction.

As it turned out, bears were unable to move the market below Thursday's low, because of course they were.  So the "if" part of the "if/then" equation never came to pass, and bulls thus knew they were free to grind the market in a circle for most of the session, which is exactly what they did.

While it's never good to trade "for excitement," trading and charting are two different animals.  Obviously, in terms of only what I publish in these updates, I'm charting as opposed to placing trades WHILE I chart -- and frankly, I find markets like this one incredibly boring to chart.  And not very interesting to write about.  Partially that's because I've learned over the years that there is a great temptation to try to "find something interesting" to write about -- but in the case of a trending market, that temptation can be dangerous, because the fact is, there IS nothing interesting to write about.  Every update in a market like this could basically read:

"Second verse, same as the first."

And I could keep publishing the same chart over and over without even updating the price action, and probably no one would even notice... unless I accidentally spilled ketchup on it or something.

The point is, this is why I've been keeping the updates short for the past month and a half or so.  Because while I've seen a couple, "eh, maybe" moments here and there, for the most part, there hasn't really been much to say.

And for bulls, that's a good thing.  It's probably a good thing for bears, too, because there's nothing worse than constantly thinking that THIS IS THE TOP OMG OMG OMG, only to have the market blow right through it again and again.

If it's at least a tradeable top, that's not so bad -- but in this market, we haven't even seen any tradeable tops since December.  So in that sense, I'm thankful that I've mainly stuck to "boring updates" through the majority of this move (and, as a general rule through the years, through these types of moves).

Eventually, the market will get tired of rallying, and while we don't always catch the exact top (sometimes we do), we rarely get caught looking for more than a session when the trend does finally change.  And as I see it, missing the first session (or even two) of a turn is vastly preferable to shorting the whole way up.

Last update noted that "if bulls can reclaim the channel, then all bear bets are off" -- and bulls are in the process of doing just that:

So all that to say (yet again):  As long as SPX fails to sustain a breakdown, there's nothing for bulls to do but ride the trend, and nothing for bears to do but keep waiting.  Trade safe.

SPX Update

Last update noted that the market had reached a potential resistance zone, and so far it has at least reacted to that zone:

If bears can push below yesterday's low, they could get something going in terms of a larger correction.  If bulls instead reclaim the channel (and the prior high with it), then bears are back to awaiting more propitious times.  I tend to suspect bears might finally be due a correction, but this rally has been pretty relentless so far, so we'll see...  Trade safe.

SPX Update: A Great Market for Spearfishing

This remains an exciting nail-biter of a market, by which I mean it's a great market to consider taking up a hobby like skydiving or spearfishing... or even something truly daring, like stamp collecting, which is considerably higher intensity than this market has been lately.  VIX is still hovering around 15, although by all rights, given the price action of late, VIX should be trading at zero or below.

SPX ended up capturing Friday's "if/then" target that very same session, and has finally reached/is reaching its most recent intermediate resistance zone, so maybe the market will react to that and give us something more exciting to trade:

In conclusion, SPX has been trying to lull everyone to sleep, and it's done a darn good job, so maybe that complacency combined with the current resistance zone will finally spark a little volatility back into the market.  We can only hope.  Trade safe.

SPX Update

Yesterday saw the market gap lower at the open, but that decline caught itself on the black trend channel shown in Wednesday's update.  The pattern from here does at least suggest some potential "if/then" targets.  Theoretically, anyway.  The market lately hasn't been terribly kind to its own patterns, so don't get too married to these.

In conclusion, so far bulls are continuing to hold the black trend channel, but if bears can turn the market back down and sustain a break of the black trend channel, they could potentially muster a larger correction here.  Trade safe.

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Forum Issue

Just a quick note that the forum issue has been resolved, so I've been assured by support that (hopefully) it should be back up shortly.

In the interim, forum members who are also registered with Disqus (you can register in about a minute if you're not) can use the comment section below this post if they'd like.

SPX Update

Monday's update noted that "today could be make or break for the near-term bear count," and it turned out to be "break."  This market continues to frustrate bears, and has yet to offer even a decent retrace.  There really isn't much to say in a market like this, other than "the trend is your friend" -- which is why I've been keeping the updates relatively short for the last couple weeks.

In conclusion, it's still a "ride the trend" market for bulls and a "watch and wait" market for bears.  I'd still prefer to see a decent retrace at some point... we talked about it briefly previously, but there was confirming momentum at the December low, and it's unusual to see that go untested.  We saw a similar situation in 2018, though, wherein the market rallied all the way up to new highs before finally testing (and in that case, breaking) the 2018 lows.  Early-on in this rally, we discussed that as a possibility here, so we'll just have to take it as it comes for now.  Trade safe.