SPX Update: The Market Hates You

First off, for last update, I feel obligated to apologize to readers for not remembering to remind everyone yet again about "the red trend line," which I had discussed as critical in numerous prior updates.  Monday's rally briefly broke above 2150, but was then rejected at that very same red trend line (see below).  On Tuesday, SPX was unable to claim Monday's opening high, and continued to chop lower throughout the session.  Unfortunately, this leaves the near-term incredibly ambiguous.  The intermediate preferred outlook remains unchanged.

I've attempted to outline some of the near-term potentials on the chart below -- although just about anything goes in a chop zone like this, so the near-term pattern may be even more complex than those shown below, and thus may simply not be apparent yet.  These are certainly not the only options.

In conclusion, SPX continues to grind traders into submission.  Chop zones sometimes appear to serve the function of capitulating trend traders prior to a larger trending wave finally getting underway -- and to convince trend traders to bail too early once it finally DOES get underway (because everyone has been conditioned to expect more chop).  The choppy overlapping nature of the recent waves also means the near-term pattern thus remains up for grabs.  Intermediate term, I still favor lower prices.  Trade safe. 

SPX Update: No (fill in the blank)

Honestly, there's only so much you can write about a market that's been range-bound for 11 days before you run out of original things to say.  You can always repeat yourself, but that starts to get boring after a while, and also starts to get boring after a while.  For both the reader AND the writer.  Thus, I'm going to let the charts do all the talking today.

We'll start with a chart that I consider to be my crowning achievement -- my "master work" if you will -- the culmination of everything I've ever learned.  This was the first chart I drew this weekend, and the projections on this particular chart will almost certainly prove to be correct:

Ha ha!  Just a little Stockcharts humor there, designed to elicit angry responses from our Congressional "leaders."  And to break the monotony of saying "No change" again.

Anyway, here are the real charts, which, if I recall correctly, were SUPPOSED to be doing all the talking (glares sternly at charts).  First is the SPX bigger picture chart, which, you guessed it, is the same as last update:

SPX short-term:

And a few prudent notes:

In conclusion, I haven't said "no change" this often since the last time I strolled down 42nd street.  Trade safe.

SPX Update: Bears Still Defending 2150

SPX has done very little in recent sessions, except continue to reject rally attempts near the key 2150/red trend line resistance zone discussed last Friday.  Thus bears are at least keeping hope alive for a more immediately bearish resolution to this pattern, so I've updated the chart below to include one version of the more bearish option:

A near-term SPX chart below:

In conclusion, there's still no change, since the market has ground sideways all week.  Bears have continued to defend 2150, keeping hopes alive for more directly bearish near-term options.  I remain bearish on the larger pattern, and (to reiterate what I've been saying all week) do not currently believe that 2114 is a significant low.  Trade safe.

SPX and NYA Updates

Sometimes you can look at a near-term pattern and say, "Ah, this is obvious.  Here's what happens next!"  Other times, you feel like you need to see just a little more from the market.

In terms of the current picture, I'm still slightly leaning toward the blue 2/b path outlined last Friday, but bulls have not yet reclaimed the key resistance zone (also outlined on Friday) -- so the market does seem to be keeping its options open at the moment, perhaps "waiting" on the ECB tomorrow.  Thus, there is still no material change to the recent updates:

The larger pattern appears more clear-cut, and I still have a difficult time seeing this as anything bullish:

In conclusion, as mentioned previously, the downward wave from 2193 SPX appears incomplete, so I'm still inclined to believe that lower lows are coming.  The main question is still whether we'll follow the blue 2/b path, or if near-term overhead resistance will continue to contain the market.  Trade safe.

SPX Update: No Change

There's very little to add to Friday's update, except to note that bears did make a stand at the 2145-50 resistance zone, which I mentioned as the next meaningful level and the zone that bulls need to reclaim. 

In conclusion, there's very little to add today.  Either bulls get back above the red trend line, or they don't -- either way, I think there are still lower-lows lurking in the market's future, the main question seems to be whether those come directly, or after a bit more rally.  Trade safe.

SPX Captures Target 2 for 50+ Points of Profit

Yesterday started off uglier than Ben Bernanke's beard after a dust storm, but then SPX hit Target 2 and bounced like a really bouncy thing made of rubber (writer's note: come back later and substitute witty simile -- if there's time, which there probably isn't).

Presuming readers took at least partial profits at Target 2, then 50+ points of profit in a couple weeks is probably good enough, so bears can relax and play it by ear from here.  Which may be good, because I'm inclined to suspect the market has another trick up its sleeve.  Specifically, the trick noted at the end of Wednesday's update:

I should add that there is one option that bottoms near Target 2 (first chart), then rallies back up all the way to test the zone near the all-time high, THEN drops back toward (or below) Target 2 again... but I'll cover that in more detail if it becomes appropriate.

It's become appropriate to cover that, but let's start off with the 1-minute chart:

Here's a chart of the potential mentioned on Wednesday:

In conclusion, I'm somewhat inclined to suspect the complex flat outlined above, but there is no way to "prove" such a pattern until it unfolds.  This is 100% gut instinct, so I could well be wrong about the bounce continuing.  For readers who have followed these updates for the past couple weeks and are thus 50 points of closed profit to the good, it probably doesn't matter much, because there should presently be no feelings of desperation or fear of "missing out."  The bull potential is that the decline is a complete WXY correction, and thus heading to new highs -- another good reason for bears to be very cautious here, and await the pattern shown above (and its corresponding relatively-low-risk entry) before considering new positions.  If we start to see impulsive looking declines prior to the blue path materializing, then we'll consider the possibility that a continued decline may unfold more directly.  Trade safe.

SPX Update: Target 1 Finally Captured

For at least the past 18 years, I've been repeating that I felt the decline from 2179.99 was impulsive, and thus due for another leg down.  It seems like longer than 18 years since I first began discussing that prediction, but another leg down finally happened yesterday.  I'm going to let the charts take it from here:

Let's take a quick look at the "obvious" bull option, then we'll look at why I'm inclined to think it's probably not playing out:

To me, the subwaves don't seem to fit the bull option too well:

In conclusion, Target 1 from 9/30 was finally captured, and the prediction for another leg down has been satisfied.  I'm still inclined to think that there's more downside pending, but bears couldn't be blamed for displaying a little caution here near the next key level of 2119.  I should add that there is one option that bottoms near Target 2 (first chart), then rallies back up all the way to test the zone near the all-time high, THEN drops back toward (or below) Target 2 again... but I'll cover that in more detail if it becomes appropriate.  Trade safe.