SPX and NYA: Near-Term Potential

There's one near-term chart to Friday's comprehensive update -- the near-term SPX chart:

On the chart above, the ending diagonal might need two more slight new highs, while the complex flat could reverse lower directly (though would ultimately revisit these highs after visiting the 4520s or below).

Given long-term overhead resistance (chart below), the above seems like a reasonable near-term possibility, which would also accomplish the goal of being confusing to many participants.

NYA is also facing intermediate overhead resistance:

Not much to say beyond that.  Trade safe.

SPX, NYA, COMPQ, BKX, Oil: Oil's Well That Ends Well

On Wednesday, the Fed raised rates another .25%, giving us the highest interest rates in 22 years, but leading pundits to speculate that the Fed is done raising rates and will pause in September.  The market responded to the announcement like an electrocuted giraffe, lunging lower, then higher, then lower again on Thursday.

Powell, on the other hand, was reluctant to commit one way or the other, preferring to wait for the next two months of data.  And there's at least a chance that Powell might be onto something.  It's worth noting that oil was stuck in a potential basing pattern for the last couple months, at the lowest levels it's seen in the past year and a half:

NYA encountered resistance yesterday at the black trend line, which is bulls' next obvious hurdle:

BKX reached its "90ish" target, now we'll see if it can break through or not:

Still watching to see how COMPQ reacts to this back-test:

And still watching to see how SPX reacts to this 36-year-old overhead trend line:

That's about all I've got for today.  Trade safe.

SPX and COMPQ: Tyrants and Tie Rants

Today is the much-anticipated Fed Day, and many pundits have wondered whether Jerome Powell will "stay the course" and wear either his blue or purple tie, or whether he'll signal a shift in stance by wearing something new.  Since we covered all that in great detail on Monday (???), there's not much to add in that regard, however, I did add the official "bear version" of the current rally to the SPX chart:

COMPQ is now attempting its first back-test from above, which is worth keeping an eye on:

Beyond that, it's just a matter of waiting for the Fed, though Lord only knows WHY we have to play this stupid waiting game every Fed day, no matter what the announcement, but that's the way things work now.  Trade safe.

BKX, SPX: Mr. Gorbachev, Tear Down This Wall

We're coming up fast on the Fed meeting (July 25-26, casual dress okay, BYOB), so you might think there's nothing to say about this market in the meantime, and you'd be half right.  But there is one interesting chart to take a gander at nonetheless:

BKX has reached a much smaller trend line, but it's also worth a gander (though not a goose):

In conclusion, NYA managed to put the kibosh on the most immediately bearish count, but it's not like that's a complete "all clear" for bulls.  While the most "straightforward" interpretation of things is probably that the market is in a 3/C up (as I've said previously), that's not the same as saying 3/C is a slam dunk, so we'll see if the Fed causes any ripples.  Trade safe.

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.