SPX Update

Since last update, SPX broke the all-time-high, which serves to eliminate the wave (2) count from consideration.  It does still leave open the option of a complex B-wave into the new high.  2096-98 was noted as the textbook target for that pattern, and SPX closed Friday at 2096.99.

In the event the current rally is wave C of B, then there are roughly enough waves in place for a complete rally:

In conclusion, SPX went out on the highs, so there's nothing in the way of an impulsive decline yet to suggest a turn -- thus there is nothing to add any confidence to the possibility that wave C of B is complete.  Bears should be aware that, in the event SPX can sustain this breakout, then this could turn into a trend-following wave; however, if the market turns from this zone, then bears have a decent shot at getting something started from here. 

In other words, the market is in an important inflection zone, and bulls and bears alike will have to respect how SPX responds.   The very first step for bears would be an impulsive decline from Friday's high, to help add confidence to the expanded flat scenario.  Ideally, we'll have a bit more significant information by next update.  Trade safe.

SPX, INDU, NDX, BKX Updates

Back on February 2, the preferred count anticipated that there would be a break and whipsaw of 1988 SPX, and then a rally all the way back to 2064+.  From there, it anticipated that the 1980 lows were then likely to be revisited.  Yesterday, SPX closed a mere 24 points beyond the 2064+ target, but so far, the rally has defied any attempts to anticipate a top.

Last update suggested a "canary" for bears to watch, in the form of BKX, and the key level noted here proved to indeed be a solid tell that the rally had more steam left in it:

Worth noting is that NDX made a new high yesterday, thereby eliminating its most bearish count, but not all intermediate bear counts.  It hasn't broken out over its November highs quite yet, but bears should probably be cautious in the event that NDX can sustain a breakout:

SPX is very close to its all-time-high, but as of this moment, still trading just below.  Here again, a breakout would eliminate the most bearish count, but not all bear counts:

INDU, on the other hand, continues to lag SPX and NDX, and still has a ways to go to reach its all-time high.  This is interesting, because usually INDU leads SPX.

In conclusion, there's not much to do analytically until we see if SPX can break the ATH.  If it does, then the wave (2) count is off the table, but the B-wave count is not.  Frankly, there's something a little "off" about the current wave, and it has been almost impossible to count at a micro level.  It has been ripe with overlapping structures, and reminds me of the wave from 1988 to 2064 SPX.  This leads me to wonder if it is not the impulse we were expecting, but perhaps is instead another 3-wave rally. 

In any case, today should help answer some questions on the intermediate picture -- and until those questions are answered, there's not much more to add.  Trade safe.

SPX, INDU, COMPQ, BKX Updates

I'm going to simply let the charts do the talking for today's update.

Let's start with SPX 30-minute:

SPX 1-minute.  Note "the alternate count would obtain preferred status" applies only to the near term wave count:

INDU 1-minute:

BKX:

And finally, COMPQ presents an interesting pattern:

In conclusion, there is something I'd like to add which isn't discussed in detail on the charts:  In the event yesterday's rally was a one-day wonder and we begin declining directly (as suggested by the near-term preferred count), then I think bears and bulls alike want to watch the zone near 2030 SPX very carefully as a potential support zone.  There is a chance that the last leg of the rally was an extended fifth of Wave (3), which would mean that we're about to embark on the second leg of a double-retrace to the noted zone -- and then head back up to 2073+ in Wave (5).

Intermediate-term, the preferred count remains unchanged for the moment.  Trade safe.

SPX, INDU, BKX, NDX: Upside Turn Targets Captured; Market Turns

Friday saw the upside targets from January 30 captured across the board, as SPX broke above 2064, and INDU broke above 17922.  While there are times that Elliott Wave dictates a "watch and wait" approach, there are often multiple occasions during each year in which the market tips its hand just enough for us to see what's coming next.  We can see on the first chart below, which was originally published on January 30, that the market has followed the path exactly as projected (to red C/blue (2)). 

Thus, the preferred count netted more than 120 points of closed profit in only the past 6 trading days.  And, for those who reversed short at the highs, the preferred count has an additional 9 points of open profit as of Friday's close.  Of course, it remains to be seen if the wave will continue to follow this exact path, or if the market will open up new potentials -- but either way, the last two months have been very solid for the preferred near-term wave counts.

The funny thing is, there's currently no material difference between the January 30 projection chart (below) and the market's actual performance, right down to both the turns, and the dates where the turns are shown.  I almost feel like I don't even need to update it with the actual price action (!).  This actually makes me a little nervous, because I figure that, eventually, the market is due to throw a curve-ball into the mix.

(Generally speaking, I don't do time projections; so please don't expect the dates to always line up this well.)

Friday's update suggested that the market still needed a final thrust up in wave (5) of C, but that the rally had a good chance of coming to an end during that same session.  So far, everything has played out as anticipated, and Friday's decline appears to be impulsive, suggesting there is more downside still in store:

No change to INDU's chart since January 30, and, as noted, the 17922+ upside target was captured:

Next is INDU's near-term chart below:  (continued, next page)

SPX, INDU, RUT: Perchance the Rally Ends Today...

There's been no change to the outlook for some time, so let's get right to the charts.  The rally has finally come within a few points of the upside target zone.  There should be a bit more upside remaining, but this is an interesting inflection point, and there is a chance that the rally ends today.

Same potential on INDU:

INDU's daily chart, for context:

SPX two hour chart:

Finally, RUT does present an interesting possibility:

In conclusion, the "bear count" has netted roughly 80 points of UPSIDE profit in SPX over the past few sessions, so being a bullish bear hasn't been such a bad deal lately.  From an intermediate perspective, the bear counts remain preferred, but we'll begin to discuss bull options in more detail if that becomes appropriate.  The first step for bulls would be to reclaim the all-time high.  Trade safe.

SPX and INDU Updates: No Surprises So Far...

In the last two updates, the preferred count expected new lows south of 1988 SPX, followed by a strong rally, which is exactly what we've gotten since then.  There is thus no material change to the outlook, though in the interest of prudence, I've noted the current inflection zone on the charts.

Let's start with SPX:

Next, let's take a closer look at the wave count which could underpin the current inflection zone.  We'll start with INDU, because I've detailed that count more specifically on that chart.  The count in black is considered the alternate count for now:

The alternate count on the SPX chart is essentially the same as INDU, so is painted only in broad strokes on the SPX chart:

Here's a bigger-picture view of INDU via the daily chart.  INDU and SPX are largely expected to move in a very similar, though not necessarily exact, fashion.

Finally, INDU's 5-minute chart below:

 

In conclusion, there's no material change to the outlook since last week, and it is currently still anticipated that this is a corrective rally, which will ultimately end with new lows for the intermediate term.  Nevertheless, I would be remiss to not at least mention that, with the recent new lows, the bulls have finally opened up at least the potential now for new highs over the intermediate term.  That bull count is being viewed as a heavy underdog right now, because, presently, the best fit for the charts is still that this rally is a correction to a new downtrend.  Thus we'll cover the bull count in more detail only if it becomes appropriate to do so.

It's worth noting that the current rally fits as a c-wave, since c-waves function as the great imposter.  The job of a c-wave is to convince everyone that the trend has changed -- so the purpose of this rally is to convince everyone that the "correction" is over, that the market has sounded the all-clear, and to make as many people bullish again as it possibly can.  Trade safe.

SPX and INDU Updates

Last update expected lower prices over the near term, and the market obliged.  There were two near-term wave counts shown for INDU, and INDU closed right on Friday's target for the more conservative of the two counts, at the blue (B)/2 label.  This is the moment of truth, and if INDU sustains a breakdown at 17136, then we'll have confirmation of at least a fifth wave decline underway. 

Building the next larger wave degree from the current near-term pattern, if INDU breaks 17136 immediately, then we can probably expect a test or breach of the 200 DMA:

An additional INDU one-minute chart contains some further discussion on the pattern:

No change to the SPX counts:

And a more basic support/resistance chart on SPX:

In conclusion, on an intermediate basis, there's no change from Friday's update (or the updates of the past few months, for that matter).  Basis near-term, a breakdown here would need to be respected as holding at least considerable bearish potential energy, and I would not look for an immediate bottom in that event, but expect at least some degree of follow-through.

On a near-term basis, on Friday, the market was expected to decline to test the recent lows at the minimum, and that's what happened -- so now we've hit the first inflection point, and there's simply not much more to be done in the way of analysis until the market declares its next intention.   Trade safe.