SPX, INDU, BKX, NDX: INDU Approaching Next Target Zone

Last update, we talked about how bears may be getting close to finally having their day in the sun, and it does appear we're getting closer. 

INDU is now very close to its first upside target zone:

BKX has continued to struggle with the noted B/2 resistance zone for a while now:

Bulls have thus far held the bull/bear dividing line on SPX, so we may be headed to the upside target next (jury is still out for the moment as to whether they'll be more downside first or not, but as discussed last update, we still have a potentially-complete ABC decline at 2459 unless/until bears prove otherwise):

And NDX may have a bit more upside over the near-term, but does look more like an impulsive decline from the ATH than a corrective decline... so a retest of the ATH would present a relatively low-risk short opportunity -- with a tight stop, of course (not trading advice!):

In conclusion, we're ahead of the game here, and that can be dangerous if one has the wrong mindset in a market like this -- but it still seems that it's not unreasonable to continue to believe that we're closing in on completion of a fifth wave.  Just keep in mind that "tops take time," so it's possible it will draw out a bit longer than bears want it to -- and, as of this moment anyway, we're still looking for a bit higher prices in at least a few places before it's all said and done, so there's probably no rush just yet.  Trade safe.

SPX and NDX: Bears Get a Shot

Yesterday saw the first signs in a while that bears haven't all died and gone to Yellowstone.  As of yet, we don't quite have an impulsive decline in SPX, though.  And even if we get one, we won't immediately be able to rule it out as wave C of an expanded flat -- but a breakdown at the key level noted below (2458) would certainly call for bull caution.  And it might even give bears the encouragement to take a crack against the ATH on any decent subsequent bounce.  If yesterday's low holds, then we have no impulsive decline and simply have an ABC down, of course, in which case SPX would likely hit the target zone next:

NDX, on the other hand, DOES look like an impulsive decline.  I can't entirely rule out an impulsive c-wave for a flat, but either way, I have to give bears the near-term edge here as long as 5996 high holds.

In conclusion, it's always possible bulls will pull out a stick save -- but we're finally seeing some signals that suggest that at least the near-term power may have shifted, or be about to shift, back to the bears.  Trade safe.

SPX, INDU, RUT: My Favorite Market

Anybody remember the show My Favorite Martian?  It was actually a bit before my time, but they were still showing reruns when I was a kid.  I ask because lately I've been getting the theme song stuck in my head whenever I try to chart this market -- because this is certainly My Favorite Market.

Here, try it... read the titles below as "My Favorite Market," then add the theme song... and, voila (French, literally: "aaargh!"), you'll suffer from the same brain-debilitating mental garbage that I'm currently enduring!  (Sorry! Yet somehow the song feels strangely appropriate to this market.)

Anyway, moving on to the charts for My Favorite Market, SPX at least, seems to be on track for the next target zone:

INDU still has its options open -- but at this stage, if it sustains trade above the ATH, such a move might then suggest that it's going to skip the red "c?" option.

Bigger picture INDU is unchanged:

RUT has required yet another look, since it finally broke out over the key 1442 level.  I'm still not willing to call this whole chop zone of the past few months a bull nest, though -- so the most reasonable option (with the diagonal dead) is an expanding triangle fourth wave.  And the subwaves fit that pattern:

In conclusion, this has continued to be the most difficult market we've seen in years, in my opinion.  I would continue to advise bears to avoid front-running this pattern, and await an impulsive decline before committing to any strong action.  Trade safe. 

And Now Back to Our Regularly Scheduled Programming...

Just a brief post to let readers know that my fever has finally broken, so updates will resume their normal schedule on Wednesday.  Many thanks to those of you who sent well-wishes! 

BKX and INDU: Markets Still Fractured

The only thing worse than this market is my current sinus infection, so I'm going to keep today's update brief.  There really isn't much to add, but the BKX chart is worth an update:

INDU has left the b-c option alive.  I'm not updating anything on this chart, because when I try to, StockCharts deletes everything -- so it's only been auto-updated with the price action:

In conclusion, this market's been harder to trade than a heavily-used Beenie Baby lately, because there is a serious fracture occurring across markets.  This suggests that there is not enough liquidity available to pump everything higher at once, and this does represent a noteworthy character change from the past few years, during which virtually all indices rallied together.  If this trend continues, it may add a bit of weight to the idea that the market is in the fifth wave preceding a decent correction.  Trade safe.

INDU, SPX, and NDX Updates

I came down with a nasty head-cold over the weekend (possibly due to the rapid changes in the market's altitude! (rimshot)), so I'm going to let the charts do most of the talking today.  First off, INDU is attempting to sustain a breakout over its recent noise zone; if that breakout holds, then it will be on track for the next long-term upside target zones.  (We'll look at the near-term picture after this.)

Near-term, the diagonal appears to be the first line in the sand, but careful of whipsaws and head-fakes if we do back-test it -- sometimes markets get ugly around such zones:

SPX is in a similar position to INDU:

I'm still holding out hope that my first instinct in NDX (back when we were near the bottom) was correct. If so, the rally should be nearing completion.  If not, then it will just keep going, of course.

In conclusion, it's going to be hard for bears over the immediate future, because SPX and INDU are both in patterns where the bears' best NEAR-TERM hopes are for a counter-trend decline in an unpredictable expanded flat.  Thus I wouldn't advise trying anything too bearish unless we see an impulsive reversal in those indices.  Bears can still hold out some hope for NDX -- for the moment, anyway -- but do be careful if it sustains a breakout over the prior highs.  Trade safe.

SPX and INDU: Enough of this Noise, Let's Look at the Bigger Picture

Last update noted that bears needed to make a stand, but they didn't, so numerous markets ran toward the upper end of the recent noise zone -- which is what happens when you break near-term resistance inside a thinly-traded range.  Of course, everyone is now bullish as we reach the upper edge of the noise zone, but now we're into the reverse of the warning I published near the bottom ("Just remember it's never a good idea to get too bearish this close to support -- some signals suggest it will fail, but in the end, either it breaks or it doesn't.").  At this point, it's not a good idea to get overly near-term bullish until we see a sustained breakout over resistance.

But near-term noise aside, I think the recent noise zone is becoming a bit of a distraction from the larger view (this may in fact be the market's exact intention) -- so today we're going to step back a bit from all the near-term noise and take a closer look at the big picture.

For our big picture examination, we'll focus on INDU's long-term chart.  The option not discussed on this chart is for an extended fifth of v -- I allude to the way a bear would protect themselves from that in the notes (specifically: "watching for completed patterns followed by larger impulsive turns becomes more important") -- but for now, we'll just keep that in the back of our minds and not focus too much on it unless/until the market tells us to.

Near-term (below), there are still several paths that INDU can take to complete the pattern shown on the long-term chart:

SPX has similar options (though lately we can't really rely on anything to move in sync with anything else):

In conclusion, the near-term is still a mess, but should clarify fairly directly.  Bigger picture, though, it does look like we're going to be completing wave 5 of a larger fifth in the not-too-distant future.  When that wave completes, bears should finally get some time in the sun.  Trade safe.