SPX, NYA, WLSH, COMPQ: SPX Breakout Target Captured

On Friday, SPX captured its next breakout target zone (2050-60), and perfectly tagged a resistance line.  The blue line becomes first meaningful support:

NYA is still above its breakout zone.  If it back-tests the down-trend line, what happens there (if it acts as support or not) will be informative:

Next is simply an interesting chart of COMPQ -- interesting because I drew the blue trend channel almost a year and a half ago, and the market reacted to it strongly:

(Note:  Typo -- blue line tagged in February, not January.)

Next is a market I haven't published in a long time:  The Wilshire 5000.  This chart examines the bull count in detail, and contains a few random thoughts:

In conclusion, despite the neck-breaking pace of the current rally, I'm still modestly inclined to favor the bear case, but we have yet to see a larger impulsive decline -- and that's a prerequisite that we need to see before we even attempt to consider the possibility of a top.  All that could, of course, change at any time -- but the beauty of waiting for an impulsive decline is that it's hardly "without warning."  Trade safe. 

SPX, NYA, Crude Oil: Mixed Markets

Since last update, the Fed announced that it's going to keep rates steady, and the market has rallied.  Today's update will be rather short and sweet, and we're going to start with NYA, which has broken out over its intermediate downtrend line:

Oil has broken out from its bullish falling wedge pattern:

While SPX is still challenging layered resistance:

In conclusion, NYA and crude oil both have breakouts.  NYA's breakout is unproven yet, while SPX is still challenging resistance.  RUT and BKX have not yet broken above intermediate resistance, so the picture is mixed at this moment.  Trade safe.

SPX and BKX: Casual Fed Friday

Today is the long-anticipated Casual Fed Friday, and the Fed is expected to announce whether it will raise rates or not while dressed in shorts, sandals, and Hawaiian shirts.  Pundits can't agree on what the announcement will be, but many do agree that the vast majority of pundits disagree with each other. 

As to what the Fed will do, some fundamental analysts have been "looking deeper" for clues, even going so far as to analyze Janet's latest choice of breakfast foods.  It's come to light that, more and more, Janet has been having eggs for breakfast, and many analysts feel this is bullish, because eggs are fragile, and they remind Janet that the market itself is fragile.  Others have suggested that Janet is cracking eggs lately as a form of "mental preparation" for bursting the market's bubble. 

Never mind, I guess there's no consensus there, either!  We may have to look for clues in even more inane places, such as in the verbiage from the last Fed minutes.  But that would require me to actually read the Fed minutes, and I have a tendency to develop migraines these days, so I'll leave that to the pundits. 

Frankly, I miss Bernanke.  That guy not only had a beard that wouldn't quit, but he was incredibly easy to predict.  I think I was batting .900+ on my predictions of what the Fed would announce under Bernanke.  But I don't even bother trying to predict Janet, probably because she lacks a viable beard.

Anyway, the wildcard for the market right now is whether the ECB and BoJ's negative interest rate policy will send enough cash into U.S. markets to reinvigorate the bull, despite Janet and her egg-cracking.  I can't answer that question, but it is a consideration to... consider.  ("Allow myself to introduce myself.")

As discussed last update, the market has managed to work its way into an inflection point -- and, yet again, this seemingly-important inflection hits just in time for Fed Friday.  What a coincidence!  Amazing how often the "random market" manages to do that.

There's really very little to add to the last update, except to again reiterate that multiple markets are now up against more significant resistance.  Below, I've updated a long-term BKX chart that has served us well over the past three years.  This chart underscores the significance of the current inflection point:

SPX did form an implusive decline from 2024, although the top is messy enough that I can't be certain it's not the C-wave of an expanded flat.  If it's the c-wave of a flat, then bulls need to hold 2005 -- if that fails, then the impulsive decline was wave A or 1 down.  And in the event the impulsive decline from 2024 is wave A/1 down, then I'd watch 1995 +/- first, and 1982-86 second as potential targets.  If those zones fail to offer support, we could drop toward 1969-73.

Below is a simple near-term support and resistance chart for SPX:

The market hasn't done much since last update, with multiple markets still testing meaningful resistance -- so I'll simply reiterate the conclusion of last update: 

On the bull side of the coin, to this point, resistance levels have proved to be only short-term challenges.  Nevertheless, the current levels, and the zone just north of here, are potentially a more significant degree of resistance than the rally has faced so far, and thus should be a more significant test of the rally's true strength, or lack thereof.

Trade safe.

SPX, NYA, BKX: 75-Year SPX Chart Reveals a Unique Weekly Fractal

In recent updates, we've focused primarily on the short-term waves, so today we're going to take a more detailed look at the big picture (and in the case of one chart, the REALLY big picture).  We'll also examine a few near-term patterns that might help as signposts along the way.

Let's start with a long-term historical chart that examines the current wave from a fractal standpoint.  The chart below "only" shows the prior 75 years of SPX, but I did examine SPX's patterns going back to its inception -- and the thing that jumps out is how unique the current pattern is on the weekly chart.  I find this somewhat intriguing, because it's pretty rare that you can't find a nearly-exact match for any given fractal in your historical charts (or, as the New Gangsta English Version (NGE) of Ecclesiastes says: "There ain't nothing new under the sun, yo.").

(This chart is 2000 pixels across -- to view at full size, right click and select "Open in New Window," then click the chart again.  That's what you do if you're using Windows, anyway.  If you're browsing from a Mac, I have no idea what you do, but it probably involves arbitrarily suing Apple over something.)

 
Now that we've established that the current move is somewhat unique, let's take a look at bull options for the current wave, because folks have been asking for 'em.  It's worth noting, though, that SPX is finally challenging a more important resistance zone than it has faced thus far.  Along those lines, also note that the more immediately bearish count is not detailed on the chart below (since it's been covered in detail previously), but is simply mentioned in the blue call-out box:

NYA is also challenging more significant resistance, and has effectively reached the third resistance zone that I spoke about in February:

Stepping away from the big picture, BKX did not make a new high on Friday, and may provide some additional clues heading forward:

Zooming out a little on BKX, we see why the next move in this pattern may afford some predictive power in its wake:

In conclusion, if you've found this market at all challenging lately, then buck up!  Nobody has ever faced a weekly fractal exactly like the one we've been dealing with -- so "challenging" is par for this particular course.  On Friday, I mentioned the area around 2022 as potential resistance on a breakout, and SPX closed right at 2022 -- today we'll find out if this area is going to indeed offer any resistance.  NYA is also challenging its down-sloping trend line.

On the bull side of the coin, to this point, resistance levels have proved to be only short-term challenges.  Nevertheless, the current levels, and the zone just north of here, are potentially a more significant degree of resistance than the rally has faced so far, and thus should be a more significant test of the rally's true strength, or lack thereof.  Trade safe.

SPX Update: Chop Zone Fun

Last update drove home then point that my interpretation was that the near-term downward wave was incomplete, then speculated on what that might mean for the bigger picture.  The near-term read was right, and there was indeed more downside still pending.  The speculation that followed that conclusion may not have been as accurate -- to be determined. 

For one thing, I had speculated that it was "at least possible" that SPX was forming a bear nest, but that was invalided at Thursday's open (when the prior relative highs were broken), which thus negated the potential bear nest targets.  SPX then went on to decline sharply, and then whipsawed the black support line. 

So, is that it for the decline?  Well, it's at least technically possible now that the anticipated new low was all she wrote for bears.  I'm still not a big fan of this market, because I've felt the big picture remained ambiguous (as I've stated quite often), so I'm simply doing the best I can to identify the near-term inflection points -- so far, each of those inflection points has generated a slight reversal that has lasted from 2 to 5 sessions, but bulls are then powering back up and through those zones.

To this point, we have had only small impulsive declines, but none at higher wave degree.  Until we see a larger impulsive decline, the trend remains up (impulse waves are the market's biggest "tells" as to larger trend).

The near-term bullish signal in yesterday's session was fairly clear:  SPX held the black trend line (I noted on Monday that this zone was important), then whipsawed its breakdown:

 Finally, shown below is one speculative option for the current pattern.  Take this with a grain of salt, because we could just break out and run instead of forming a complex pattern like this.  But this was my first instinct after studying the charts last night.  If 2009.13 holds, then bears have options for the retest to mark wave 2.  If 2009.13 breaks, then it could still mark a (b)-wave..

 
In conclusion, the wave remains open to interpretation at higher wave degree, and now the near-term pattern has formed itself into a chop zone.  My best guess is shown above.  Trade safe. 

SPX, RUT, BKX: Targets Captured; Here Are the Next Key Levels

Monday's update noted that SPX had formed only its second impulsive decline since the rally began at 1810, and that trade below 1993 would confirm that read, and generate targets of 1987 and 1977.  At Monday's open, SPX broke 1993, and yesterday, SPX reached the 1977 target.

The question now is whether that's all she wrote for the decline, or if bears are just getting warmed up.  Let's take a look at the charts and see if we can answer that question.

First is the SPX one-minute chart:

What jumps out immediately on the SPX 10-minute chart is the break of the uptrend line, and the chart discusses the levels I'll be watching next:

Here it is again on the 30-minute chart:

Below is an update to the BKX chart I published on Monday -- and this market also captured its downside target, and then some. (Typo:  "Note the the..." should be "Note that the..."  This typo was brought to you by the Department of Redundancy Department.)

Finally, RUT encountered resistance at "the scene of the crime" breakdown zone I noted on March 4:

In conclusion, the downward wave does not appear complete.  There are certainly ways to count it "creatively" and come up with a complete downward correction, but that requires the use of some unconventional counting techniques, so that has to be considered lower probability at this stage.  Of course, if bulls can sustain a breakout over 2010, then all bearish bets are off for the moment, no matter how outlandish the wave looks. 

If I run with the assumption that the downward wave is incomplete, then I'm left trying to determine "How incomplete is it?" and the most likely answer would appear to be a bear nest.  In that event, we'd probably break the key overlap of 1962, thereby eliminating the most bullish near-term counts.  Thus, the final conclusion is that this bears presently have the best shot they've had for a trade-able top since the rally began at 1810.  Trade safe.

SPX and BKX Updates

On Friday, SPX closed at 1999.99.  This led The Artist Formerly Known as "The Artist Formerly Known as Prince," to re-release his classic hit single over the weekend, with a slightly modified chorus ("Tonight we're gonna party like it's nineteen ninety-nine point ninety-nine." (keyboard solo)).  Dennis Gartman then announced that he would be shorting any years ending in 99, which immediately caused those years to rocket past the century mark.

In other news, last update speculated that Friday had the potential to mark a high; today we're going to discuss a couple signals to watch.  We'll start with the 1-minute SPX chart below:

As we can see, Friday's high was followed by an apparently-impulsive decline.  This is only the second time this has happened since the rally began at 1810.  The last impulsive decline came at 1946, and was followed by another impulse down, but proved to only be an ABC.  If SPX breaks 1993, then bears do need to stay alert to the possibility that one more wave down (for an ABC) might be all the market wants.  An attempt to answer that question in advance led me to look deeper, which led me to BKX (below):

On BXK, we can see potential for a breakdown to lead to at least a bit deeper retrace (even in the event of an ABC decline).  This suggests that bulls should be cautious in the event of a breakdown of the noted levels.

In the event we continue higher immediately, there is (theoretically) overhead resistance in the SPX 2015-2020 +/- zone, so that would be the next area to watch.

The 60-minute SPX chart is shown below:

In conclusion, trade below 1993 would at least give bears a shot to get something going, although 1960+/- is the first truly meaningful support zone.  To the upside, 2015-2020 +/- is the next potential resistance zone.  Trade safe.