SPX and BKX: If I'm Being Redundant, Then Please Allow Me to Repeat Myself...

SPX is still holding 2322, so there's still no change to the outlook, as summed up (yet again!) in the last update:

I have given the benefit of the doubt to that low [2322 SPX] in light of the prior strong uptrend, but if SPX sustains trade beneath that level, then we'll have to at least consider the potential that the wave we've seen to this point could be a very bearish nest of 1's and 2's.  So, what I've been saying for a while remains true:  All bull bets have to be off below that level.

If SPX holds that zone, then it's a moot point, of course.  But we're close enough to it now that it needs to be kept firmly in mind.

For the near-term moment, it looks to me like SPX wants to continue rallying with at least one more wave up, but in order to confirm that instinct, the next level bulls need to claim is 2349.  Notice yesterday's perfect back-test of the upper trend line on the aforementioned black falling wedge/diagonal:

Now, I'm absolutely not trying to scare bulls off from playing here, because the best profits are usually made when things look scary.  I am mainly reiterating my warnings in case a breakdown materializes in-between updates -- which is why I keep driving home the point that 2322 appears to be an important level.  Of course, a breakdown of 2322 would not guarantee bearish follow-through, and the market could always break that level and whipsaw immediately -- but we always need to be aware of the pattern's potential in order to make educated decisions.

No change yet to the bigger picture, of course:

In conclusion, the market's still in the same basic position it's been for all the recent updates:  as long as 2322 holds, I will continue to give the prior uptrend the benefit of the doubt and lean very slightly bullish.  But if SPX sustains a breakdown at that level, then there is significant bearish potential energy in this pattern.  Trade safe.

SPX and RUT: Don't Count Your Chickens Until the Cows Come Home to Roost

Well, I'm not thrilled with this market currently.  The issue I've had since the beginning remains, in the form of the 2322 low in SPX, which could be interpreted as a B-wave (meaning it would fail).  I have given the benefit of the doubt to that low in light of the prior strong uptrend, but if SPX sustains trade beneath that level, then we'll have to at least consider the potential that the wave we've seen to this point could be a very bearish nest of 1's and 2's.  So, what I've been saying for a while remains true:  All bull bets have to be off below that level.

If SPX holds that zone, then it's a moot point, of course.  But we're close enough to it now that it needs to be kept firmly in mind.

Below, I've used a more basic classic technical analysis chart of the Russell 2000 (RUT) to help illustrate the point:

Near-term, SPX cracked the 2337 level, which wasn't my ideal scenario, but (as noted on Wednesday) this in itself doesn't entirely kill the bull case... yet.  It bothers me a bit that this pattern doesn't really work as an ending diagonal in terms of the trend lines, but it does work in terms of the abc structures of the declines.  Of course, if those are bearish nests of first and second waves instead of abc's, then bulls could encounter serious trouble.  The 2322 zone continues to be the first dividing line.

Bigger picture, given the current wave structure, an immediate and sustained breakdown could prove the "or Bull 4" label placement to be too conservative (in other words, SPX could head lower than that zone).

In conclusion, bulls can maintain hope for the moment, but a sustained breakdown at 2322 would have to be viewed as, potentially, a very bearish development.  Trade safe.

SPX Update: So far, so good...

SPX finally broke from its short-term range, and headed down to the slightly-preferred "c of 2" zone on the near-term chart I've published in the past couple updates.  It promptly reversed higher and rallied 16 points, making for at least a solid short-term trade for anyone who bought that zone.  This was how I wanted to see the market behave if the preferred bull count is correct, so there's really not a whole lot to add, although I've added some targets and some caveats in the description on the near-term chart (below):

The in-between option that I haven't really mentioned is for the current rally to be wave C (with blue 1 being A, and yesterday's low being B) of a decent-sized ABC correction, which would likely peak in the vicinity of the first target zone (2385 +/-).  Nervous bulls might consider capturing at least partial profits if we reach that zone.

Bigger picture, there's no change so far.  If SPX were to sustain a break of 2322, then we'd give weight to the black "or Bull 4" option:

In conclusion, the slightly-preferred bullish count is performing as one would want it to, so there's no reason to add additional speculation to the outlook just yet -- but it's still a tight call, so I'm hardly advocating complacency.  If SPX breaks yesterday's low, it gets a bit trickier for bulls, although they still have the ending diagonal option until 2322 fails.  As long as yesterday's low holds, then the next meaningful upside target is in the 2385 zone.  Keep in mind that if c of 2 bottomed yesterday, then we are beginning a third wave rally, so we'd expect to see some strength from the market, beginning reasonably soon.  Trade safe.

SPX Update: As the Businessman Said to the Beggar...

Friday's session was more fun than TWO buckets of monkeys, which thus leaves me with pretty much nothing to write about here -- since for all practical purposes, nothing happened on Friday.

So, no material change to the near-term outlook:

And of course, no material change to the bigger picture:

In conclusion, as the businessman said to the beggar:  "No change."  Trade safe.

SPX Update: More Fun than a Bucket of Monkeys

Since last update, SPX briefly cleared 2371, but then failed that level in the same session.  The most "straightforward" wave count is that Wednesday's move represented a B-wave rally within a larger expanded flat second wave, with the corresponding C-wave decline either complete or nearly so.  The bear option is that the "or C?" label on the 1-minute chart was in the right place and is the right count.

It remains a bit difficult to hold too much conviction, due to the ambiguity of the 2322 low.  But I'm still very slightly inclined to lean toward the more bullish interpretation.  But it is just a "lean" toward -- so an appearance by the bear option wouldn't surprise me, so a sustained breakdown at 2322 would have to be respected.

Still no change to the bigger picture chart:

In conclusion, this is one of the tougher calls we've seen in a few months, so I'm leaning toward the bull option, but not married to it.  Trade safe.

SPX Update

Bears' little respite looks like it could be short-lived.  The decline appears to be an ABC, and this would be confirmed with a breakout over 2371.

I'm having trouble getting charts to load today, so we're just going to look at the bigger picture chart (since that was all I could get!).  A sustained breakout over 2371 will suggest a third (or C) wave rally at smaller degree, and suggest a trip to at least the 2390 zone, and quite possibly to new highs.

In conclusion, I would have a hard time justifying shorts on any sustained breakout over 2371, at least for the immediate future.  The next place one could look (if you're bearish) would be 2390ish.  Of course, if 2371 holds, then we still have the option of a complete C-wave on the table -- but at this exact moment, it doesn't look terribly promising.  Trade safe.

SPX Update: No Material Change

Last update discussed the bull and bear cases in detail, and Friday did nothing to shed additional light on anything, amounting to basically a sideways grind.  Worthy of at least passing mention, the Nasduck 100 (NDX) has already made new highs.

In any case, the bigger picture charts are unchanged from Friday, and essentially unchanged from Februrary 2013.  I am still presuming that we are in a larger fifth wave, which should mean this bull market is finally nearing its end, in relative terms.  Within that framework, in all likelihood, we still have a smaller degree fifth wave higher left to unravel ("smaller degree" in this case -- relative to the entire bull market since 2009 -- is still pretty decent-sized).

Near-term, SPX bounced from the noted red trend line.  It might test that line again today.  If it fails, then it could take aim at the blue trend line.

In conclusion, we're still in the same place we were on Friday, so there's no material change to the recent updates.  Trade safe.