SPX, NYA, BKX: Pass the Salted Crow

NYA finally broke its invalidation level, which at least helps clarify the chart picture a bit.  That said, it does mean that I made a mistake "betting on the bears" analytically, and I apologize for getting that wrong.  Fortunately for bears, at least, there haven't been any recent impulsive declines to cause a stir and signal tentative confirmation of the inflection.  Long-time readers know I generally advise waiting for the first impulsive decline before acting strongly (which is why a few weeks ago (June 28), I only suggested a "small stab if one was bearishly inclined"), and "no system is 100% right, so let's try to limit the damage when wrong" is one reason it helps to be patient.

Having cleared its prior swing high, NYA's most straightforward option would be for the current rally to be a C/3 wave.  There are still other options, but this is the most "straightforward."  On the opposite end of the spectrum, the absolute least straightforward option would be for NYA to form a b-wave high and drop back toward the blue 2/B.  Until we have signals for that (such as an impulsive decline), we'll just keep it in the back of our minds, though.

SPX, likewise, is apparently in a 3/C wave rally.

BKX is an interesting chart in this context:  If it's correct that BKX formed a large impulsive decline off its 2022 high, then it's currently in a large second wave bounce -- which, although unlikely to end immediately, will eventually end and lead to another big wave down.  This is very much worth keeping an eye on, as the rest of the market would inevitably be dragged down by a major disruption in the banking sector.  

From a fundamental standpoint, the simplification of the bull case is something like: "Due to the lessons learned during Covid and concerns about future supply chain disruptions, private industry is in the process of revitalizing the American manufacturing base, which will lead to an era of meaningful prosperity."

The simplification of the fundamental bear case is something along the lines of: "Yeah, but inflation often comes in waves (see the 1970s, when inflation rose, then dropped down to 'normal' for a few months before spiking even higher in the next round) and we've only finished the first wave.  The Fed isn't out of the woods yet.  Plus we still have the worldwide debt bubble to contend with, and the economy hasn't meaningfully contracted in order to burn off its prior significant excesses.  We're still carrying too many zombies to start a new era of prosperity."

In the coming updates, we'll take a closer look at each of those arguments (plus some others).  For now, we'll presume bulls have the ball in a C/3 wave up either way.  Trade safe.

COMPQ, NYA, BKX Updates

As I listen to the wind and rain of Tropical Storm Calvinist whipping around outside, I'm to the point with this market where I was actually hoping NYA had broken above its key level, just so I could write about something new.  But alas, not yet.  

After roughly doubling the prices of everything over the past two years (anecdotally if not "officially"), June inflation suddenly came in at manageable levels, implying that the Fed's interest rate hikes have been successful.  Hilarious that the politicians who did nothing but create massive inflation are now trying to take credit for the Fed's apparent win.

BKX is unchanged:

And COMPQ has broken above its long-term trend line:

In conclusion, still waiting on NYA to make it official (or not)... and the power just flickered on and off, so I'll end it here.  Trade safe.

NYA Update: How to Solve a Tropical Storm

Just one chart today, since it's the only chart that seems to matter at the moment and nothing much has changed since Friday:

If NYA doesn't clear blue (C), then bears have the go-ahead -- if it does, then there's a straightforward near-term bull option (represented by red "bull: 3") or an annoying and near-term bullish but ultimately bearish option for some type of ending diagonal, which is pretty easy to visualize using the upward-sloping black line and the lowest upward-sloping blue line as rough boundaries.  

In other news, fair warning that Tropical Storm Calvin and Hobbes is projected to slam directly into Hawaii on Wednesday, so on the off-chance things get hairy and/or the power and/or internet goes out, then there may not be an update on Wednesday.  If things do get hairy, my emergency plan is to call the Fed and have them raise interest rates, then call the government and have them run up the highest non-Covid deficit they possibly can despite near-record-low unemployment.  Both I and the market currently feel confident that this will solve everything.  Trade safe.

SPX, NYA, BKX: It's a Mad Mad Mad Mad World (or whatever)

The market continues to defy bears (and reality) and head higher.  Bears haven't run out of real estate just yet, but NYA is getting close, and bears need to show up soon if they want to prevent a breakout:

I haven't updated BKX in a few months, and this seems like a good time to do so:

The SPX "immediate" bear count will come under fire if NYA breaks out:

And the SPX bull count, which would also function as another version of the bear count (with both the bull and bear options being in agreement for a time; see annotation):

In conclusion, still waiting on NYA to either reverse or break out in order to clear the air.  Trade safe.

SPX, COMPQ, NYA: Party Like It's 2020

So far, nothing much seems to be going for bears, as every decline is bought like it's still 2020 and the market is expecting massive inflation from all the "stimulus."  On Monday, I noted that there was not yet a confirmative impulsive decline, and the market never formed one (and apparently never will again lol).

NYA continues to edge toward its key zone:

COMPQ is still in "back-test" territory:

And SPX is adding that "next wave up."  Whether it will end there or if that will only end up being the midpoint on a larger bull(ish) wave remains to be seen:

In conclusion, still watching NYA as the most significant of the current hurdles, so it's about "do or die" time for the bears.  Trade safe.

SPX, NYA, COMPQ: The Eye of the Storm

Last update concluded:  

[A]s I've stated previously, unless and until NYA breaks out over its blue (C) high, I'm continuing to give bears the benefit of the doubt. While there are several near-term options, if NYA is to hold its key high, then there's just not a lot of room for bulls to run much higher. If I'm wrong, then I'm wrong, but right now, this makes more sense to me than the bull alternative.

On Friday, SPX initially rallied strongly, but it then reversed equally-strongly and gave back all its gains on the day.  This is normally not a bullish development -- which, in essence, means there's no change from Friday's update.  So, I've updated the charts with the latest price action, but as I've outlined several times recently, I continue to favor the bears until proven otherwise -- thus, unless and until the market "proves otherwise" (or, conversely, until such a time as there's a more confirmative reversal), there's still nothing new to say about the charts.

NYA:

SPX near-term:

SPX intermediate term:

COMPQ very long term:

Trade safe.

SPX, COMPQ, NYA: Hope Springs Eternal

SPX and NYA have both been preliminarily rejected from the lower edges of their respective inflection zones.  As of yet, we do not have an impulse down to confirm anything, but it certainly looks possible that one will develop.

Although it's a hard market to say this in:  I continue to lean toward the bears until proven otherwise.  The question at the micro level is whether they're ready to show up again immediately.  As noted above, it's entirely possible they do, especially given that COMPQ has hit an ancient resistance line:

NYA:

SPX big picture:

Finally, I'd be remiss if I didn't disclose that SPX does have multiple near-term options here, even for the broader bear case:

In conclusion, the market is playing for keeps around these levels, and as I've stated previously, unless and until NYA breaks out over its blue (C) high, I'm continuing to give bears the benefit of the doubt.  While there are several near-term options, if NYA is to hold its key high, then there's just not a lot of room for bulls to run much higher.  If I'm wrong, then I'm wrong, but right now, this makes more sense to me than the bull alternative.  Trade safe.