SPX and RUT: "Dogs and Cats Living Together... Mass Hysteria!"

The last couple session saw SPX plummet in an uncontrollable free-fall, ultimately dropping a total of more than 8 entire points on a closing basis.  Panic set in briefly at the Fed, and Janet Yellen called a secret emergency meeting to brief Board members on what the color "red" meant.  My sources tell me that she assured them it was only temporary, and was able to stave off the very real potential of mass suicide.

Looking at the charts, we can see that, so far anyway, SPX has simply back-tested the intermediate red line from above.  Bears need to force a sustained breakdown at yesterday's low to create another Fed meeting:

Near-term, SPX pretty much ignored the lower trend line.  This means that either we just witnessed a small-degree fourth wave, or that bears fired a warning shot.  We start thinking warning shot only if there's a sustained breakdown at the aforementioned levels:

RUT has also tested a trend line from above:

In conclusion, the immediate levels bears need are at least clear.  Those levels don't guarantee the correction will get much bigger, but they at least create the opportunity for a bigger correction, so they're certainly worth paying attention to, and can act as "complacency checkpoints" for bulls (as in, "check your complacency at the door below these levels").  Presently, though, all we have is normal back-tests of previous resistance -- and so far they have acted as support.  Trade safe.

SPX, INDU, BKX: Trending Markets are Boring

Well, I hope all my readers had a pleasant Thanksgiving, and remembered to give thanks for whatever it is that they're thankful for, in the spirit of thankfulnessicity.  I do believe it was Napoleon Hill who taught that thankfulness/gratitude is one key to achieving and maintaining abundance.  And (a few years before him) so did Jesus, for that matter, by saying:  "For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath."  My interpretation of that has always been that it makes the most sense in the context of attitude.  (Apologies if I've offended anyone who associates the Bible with someone they may know who's particularly obnoxious -- that's like associating all of America with one particularly obnoxious citizen, and a bit too small-minded for my personal taste.)

So far, SPX has continued holding all relevant support levels, so there's as yet nothing for bears to get too excited about there, however, we do have INDU and BKX testing resistance levels -- and INDU is doing so in an extremely overbought condition, as we'll see on the upcoming charts.  The problem bears do need to keep in mind is that, so far anyway, resistance hasn't done anything other than pause the rally each time.  There's no such thing as permanent resistance in a bull market.

Let's start with SPX's near-term chart:

Bigger picture, SPX has recently cleared a trend line that came into play quite frequently over the past few months:

INDU reached its next target zone -- we'll see if that offers anything in the form of resistance:

And finally, BKX has now almost-perfectly tagged the intermediate confluence I mentioned a while back:

In conclusion, there's nothing to do in a market like this but follow the trend until such a point that the market says we shouldn't.  So until we see an impulsive turn lower, there's no compelling reason for bears to come out of the shadows.  Trade safe.

SPX, RUT, INDU, BKX: Intermediate Charts

(Note:  5 charts today, so the update is continued on a second page...)

So there are "difficult" markets, and then there are markets like this one, which basically cater only to the "permas."  By that, I mean they can be hard to trade if you think too much.  If you're simply a perma-bull in your approach ("BTFD! Duh!"), then you're a "genus"! (And probably a "phylum" as well!).  As someone whose name I'm too lazy to look up at the moment once famously said: "Don't confuse brains with a bull market."  Or was it: "Don't confuse brawn with Chuck Norris"?  No matter.  The point is, markets like this reward the True Believers and punish everyone else. 

That is, until they don't, of course -- at which point the True Believers get wiped out. 

But for now, the True Believers are still reaping bragging rights, and maybe eking out some amount of profit here and there, depending on how many times they've given it all back by buying near the top and selling near the bottom, and how many times they've held through massive drawdown only so they could, in the end, say: "See?  I KNEW it would come back!  BTFD -- the only way for me! Yo."

SPX finally cleared its all-time-high, and INDU has broken above prior resistance (in any bull move, step one is to break prior resistance, step two is to hold that and for resistance to act as support.  Step two has yet to be determined here.):

RUT has continued on a rocket-launch trajectory:

Continued...

SPX Upd (too short to be called an "Update")

Well, on top of the fact that there's not really anything to add to Friday's update, my internet quit for a couple hours tonight, and while it's been back on for a bit now, it's slowed to an absolute crawl -- so today's update will be super-short.

Basically, just the updated SPX chart, which includes a note about the long-term potential in the event of a sustained breakout:

Wow, it just took 18 minutes to upload that chart (!). 

Luckily there nothing else to add, really.  Trade safe.

BKX, INDU, RUT, SPX: Longer-term Views of the Charts

Today we're going to look at a few larger views of markets, but I'm going to let the charts do most of the talking.

Let's start with the long-term BKX chart, which I've only updated a handful of times since -- holy cow -- January 2013 (see bottom-most annotation).  There may be a correction pending, since BKX is challenging intermediate resistance, but by all normal rights, it's hard to imagine this BXK pattern not ultimately continuing higher toward black V.  So, even if there is a correction soon, odds are reasonable that it will be a buy op.

Next is RUT, which is also challenging intermediate resistance:

INDU is challenging a resistance zone as well:

And, of course, so is SPX, in the form of the all-time-high:

In conclusion, multiple markets are challenging intermediate resistance zones.  Normally, we'd expect some sort of reaction from those zones, and thus be on the lookout for a correction to begin soon.  As I've said for quite some time, though (sometimes directly, sometimes indirectly), it's worth a reminder that the odds are good that we're still in a larger bull market -- so, from our present vantage point anyway, it still appears that if we do have a correction soon, it will likely end up being a buy op in the long run.  Though, if we are in the midst of fifth waves higher, maybe not such a great deal in the LONGEST run, if you catch my drift -- but buy ops for the directly foreseeable future, anyway.  Trade safe.

SPX and RUT: What Might We Expect if the Market Breaks Through the Current Inflection Zone?

SPX has continued to remain below the all-time-high, but before we look at that (currently boring) chart, let's look at RUT, and consider the implications if the current inflection zone fails to put the brakes on the market:

The updated 60-minute RUT chart contains some discussion about a distinction that I believe is one of the most important understandings for people with an appetite for risk (present company included):

I made a slight adjustment on the SPX chart, although it amounts to a moot point if the market ends up simply barreling through the current inflection zone. 

In conclusion, SPX remains in an inflection zone, so this is the place for bears to take a stab if they're so inclined.  Yesterday presented a second opportunity at 2180, with manageable risk -- now all that's left is to watch and wait for the market to do its thing, or not.  On balance, I'm probably still inclined to think we head toward red C, but it's far from being a clear call.  Along those lines, I again feel obligated to restate how important it is to respect any sustained breakout from the market's current position, should a sustained breakout occur.  Trade safe.

SPX and INDU Updates

Friday was an inside day, remaining within the range of Thursday's prices.  This leaves things little changed from the prior update, so today we're simply going to give the bulls some additional intermediate airtime via the Dow Jones Industrial Average.

First up is SPX, which hasn't changed materially.  I am still very alert to the fact that SPX found support and staged a strong rally from the standing tongue-in-cheek "Bull 2 (or something)" zone that has been posted on this chart for a couple months now.  That's one of the fun things about Elliott Wave -- you might not always be able to predict exactly what the market will do, but you can often identify the key inflection points that could reverse the market.  As they say, forewarned is forearmed... so at least the possibility of a strong bounce/rally from the 2100 zone was something we were aware of well ahead of time.

On INDU, I've filled in a few of the potential bull targets with a bit more detail.  I really didn't buy into the pattern as huge 1-2 bull nest, but if INDU doesn't reverse soon, then I'm going to have no reasonable choice but to treat it as that most bullish 1-2 option until the market says not to.  As I discussed back in July, this has always been a difficult pattern for bears, because (as I wrote then) "their main hope is a big counter-trend decline."  So if this breakout sticks, then we'll just have to assume that counter-trend decline isn't going to be materializing for the time being.

In conclusion, it's still "last call for bears."  So far, they've managed to at least slow, and partially reverse, the rally at the 2180 SPX inflection point.  But from here, if bulls can sustain a solid breakout over the all-time-high, then bears will probably need to hibernate for a while.  There is significant potential energy in this pattern, so bulls may be able to capitalize on that and keep the rally going for longer than will seem reasonable.  Trade safe.