SPX and INDU Updates: Big Picture

Last update concluded:

It wouldn't be unusual to see some backing and filling soon, the market has come a long way in a very short time.  That said, I'm still hesitant to step in front of this thing -- as I have been since April 15, when I called it a "freight train" -- so take that as a heads up more than anything.  Until we see an impulsive decline, bulls could still have more tricks up their sleeves. 

And that's pretty much how it went on Monday and Tuesday: some backing and filling, then bulls reached into their sleeves and pulled out more new highs.  It will be interesting to see if we get more backing and filling or if the market breaks out and runs again, so in the meantime, let's take a look at some big picture charts, starting with this SPX chart from April 20.  We did get the candle this chart discussed and while it's never impossible for something unusual to happen, it would be highly unusual for a market to "top" on this kind of candle.  At the bare minimum, these types of candles have so much inertia that even when they are tops, they usually become drawn out tops with retests of the high and so forth:

Trend line-wise (not sure that's a phrase), SPX is above all the relevant trend lines:

It's also above the purple channel again, for the moment:

Finally, INDU remains the one X-factor chart for bulls and they would probably like to see this resolve in their favor:

In conclusion, additional backing and filling remains possible -- but the key thing bears are looking for (before getting hopeful) remains an impulsive decline.  Trade safe.

 

SPX and INDU Updates

Unless/until there is an impulsive decline, there's still not much to add to the past few updates. It is worth a mention that INDU still remains below blue:

SPX is still holding its latest uptrend line:

It wouldn't be unusual to see some backing and filling soon, the market has come a long way in a very short time.  That said, I'm still hesitant to step in front of this thing -- as I have been since April 15, when I called it a "freight train" -- so take that as a heads up more than anything.  Until we see an impulsive decline, bulls could still have more tricks up their sleeves.  Trade safe.

SPX and INDU: You Had One Job...

Last update noted:

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.  

It also noted that bears probably needed to get things going directly to keep their hopes alive, with the blue line still prominent and needing a whipsaw... and bears failed to even get below it momentarily.

INDU and NYA (not shown) are maybe the last possible sources of anything approximating bear hope for the moment:

In conclusion, SPX remained above rising blue, providing no additional hope for bears (as I wrote on April 24: "[The larger flat's] odds will begin fading the longer SPX sustains trade above rising blue."), and now has an opportunity to break away from it.  INDU and NYA are really the only remaining X-factors at this point.  Trade safe.

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.