SPX, NYA, COMPQ, BKX: Just Waiting on the Steak

INDU broke below its key zone from last update, which implies either a snap-back rally fairly directly (which would likely revisit current levels afterwards) or an immediate follow-through decline.  Immediate and meaningful bull options seem less likely, so this break seems to favor the bears for the near-term... and possibly much longer, as we'll see.

Let's take a look at SPX first to understand why:

As we've known for a while, SPX hit a major long-term resistance line, and has so far been rejected.  While rejections at resistance (or bounces at support) aren't necessarily the end of the world, this is, again, about the best bears can hope for at this stage.  And combined with the potential for three complete rally waves (as shown above), it's definitely worth sitting up and taking notice.

COMPQ next:

Next, NYA:

And finally, BKX:

In conclusion, bears have their place at the table all set, now they're just waiting to see if the waiter brings the steak (which in this case, would be a sustained breakdown at SPX support).  Trade safe.

SPX, INDU, OIL: Oil Approaching March Upside Target

First, I'd intended a couple more charts, but Stockcharts did that thing where it lets me write a bunch of stuff on the chart and then just deletes it, after which it displays a .gif of Kamala Harris laughing hysterically.  So I ran out of time and we'll have to settle for three charts.

We'll start with oil.  I'd called the bottom at 64.36, but that turned out to be a few pennies early, though the larger count shown then appears to have been correct, and I haven't moved anything (included the "2?" which I should have moved but forgot on my second attempt to get Stockcharts to accept my edits):

For our near-term proxy, we'll use INDU again (SPX would be expected to track):

Finally, SPX has remained stalled at the very long-term trend line, which may prove to be quite significant as time goes by:

In conclusion, we have a fairly clear zone to watch in INDU, and bull hopes are better served by staying above that zone, while bear hopes are best severed below it.  Trade safe.

SPX, NYA, COMPQ, BKX, INDU: Trying to Whipsaw

Last update predicted:

While it's always possible bulls will surge again, the fact that multiple markets are still below resistance heading into an important data point (one which could well show inflation rising again) leads me to suspect bears will manage to pull out the win over the near-term and create at least "another" 3/C down ("or 3/C" on the first INDU chart).

Headline CPI inflation is not showing as rising again (yet), but producer prices showed their largest increase since January -- and, either way, bears did pull out the win due to overhead resistance, and INDU indeed seems to have gotten "another" 3/C down exactly as shown in the last update.  The real question for INDU at this point is whether it feels like it needs ANOTHER up/down sequence or not:

SPX has continued reacting to very long-term resistance:

BKX has continued reacting to the resistance zone I highlighted a month ago:

NYA has continued reacting to its resistance zone:

And finally, COMPQ is in the process of trying to whipsaw its last breakout:

In conclusion, the market has remained disheartened by resistance -- but the big question on everyone's mind is whether we have an impulsive decline yet.  By all rights, the decline does appear to be impulsive in both NYA and SPX.  There's some lingering possibility that the high was a B-wave, but I'm not leaning that way and if bears can keep pushing a bit lower, that option should be erased.  Presuming the decline is not a b-wave, then the implication is that if there's another bounce from here, there should also be another leg down.  The more bearish option would be to continue lower directly, without another large bounce.  Trade safe.

SPX, INDU, NYA: CPI and Resistance

Tomorrow is CPI, which the market is watching with interest (no pun intended) for obvious reasons, so let's keep things simple today.

First off, the near-term options, illustrated via INDU (other markets should roughly track this, but INDU was the clearest for purposes of conveying information to readers):

Bigger picture, NYA remains below key resistance:

And even bigger picture, SPX remains below key resistance:

While it's always possible bulls will surge again, the fact that multiple markets are still below resistance heading into an important data point (one which could well show inflation rising again) leads me to suspect bears will manage to pull out the win over the near-term and create at least "another" 3/C down ("or 3/C" on the first INDU chart).  Trade safe.

SPX, NYA, COMPQ: Watching the Wheels Go 'Round and 'Round

 In the last update, I wrote:

Here's what we have so far: 

1. The market has indeed encountered resistance at the resistance lines we've been watching. 
2. This is about the best bears could have hoped for at this point, but 
3. So far, the decline is not yet impulsive. 

In other words, it's everything bears could want at this stage, but thus far is not enough to definitively signal they have the ball, so "just a near-term correction" is still possible. I can't sum it up much better than that.

And this is still where we are today.  I do want to add, however, that the significance here probably can't be overstated:  Multiple markets tagged resistance, ranging from intermediate to very-long-term, in concert, and were rejected.  Bears still have their work cut out for them, but so do bulls.  If bulls cannot claim those resistance zones, then lots of people could get caught standing around gawking at "the most obvious top in the world."  So we should stay on our toes here.

NYA's action was interesting on Friday:

And COMPQ is still testing its old trend line. 

In conclusion, no change so far:  Bears have hope on this reaction to resistance, but no confirmation of anything else just yet.  Trade safe.

(Side note: If anyone is wondering where the title came from:)

SPX, NYA, COMPQ: Resistance Resists...

Here's what we have so far:

1. The market has indeed encountered resistance at the resistance lines we've been watching.
2. This is about the best bears could have hoped for at this point, but
3. So far, the decline is not yet impulsive.

In other words, it's everything bears could want at this stage, but thus far is not enough to definitively signal they have the ball, so "just a near-term correction" is still possible.  I can't sum it up much better than that.

Finally, I did want to revisit the near-term chart from earlier this week, since SPX never rallied high enough to bring the speculative option into the fore:

In conclusion, as I said at the beginning, I can't sum it up much better than I did there, so I won't repeat myself here.  Trade safe.

SPX, NYA, COMPQ, BKX: Credit "Raiding"

So the big news to hit since last update is, of course, the downgrade of the USA's credit rating, only the second time in history this has occurred (the first was in 2011).  The downgrade comes from Fitch, and my favorite snip from their report is this:

In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years

Yeah, no kidding.  Government has gotten so bad that I went from having a rule to never bring up anything political (which I succeeded in doing for years) to feeling forced to mention certain issues (usually obliquely, but occasionally directly) in these updates on and off for the past 4 years or so.  Of course, it doesn't help that our country is now more polarized than ever and therefore EVERYTHING is perceived as political, even things that shouldn't be (in my view, issues such as free speech and creeping totalitarianism are not "political" issues, they are human rights issues, and thus we'd do better to stop viewing them through the lens of our political affiliations and instead fight for/against them with the same vigor on whichever side of the aisle we find them.  A politician who's trying to sell us totalitarian policies is no longer on "our" side, even if they still claim to be.).

Fitch also underscored the rising general government deficit, which Fitch expects will rise from 3.7% in 2022 to 6.3% of gross domestic product in 2023.

With a heavy heart, Fitch ultimately decided to downgrade the USA from AAA credit to a more appropriate rating of D.  I'm kidding of course.  They generously downgraded us to AA+.

While the market reaction to the downgrade in 2011 was short-lived, this still does come at an interesting time.  

SPX, so far, still remains below its next relevant long-term trend line:

NYA remains below its intermediate line:

BKX has tagged the "90ish" target zone several times, but has so far been unable to clear it:

And COMPQ is still lingering near its relevant long-term trend line:

In conclusion, if the market was looking for a catalyst to react to these resistance lines, then maybe the credit downgrade will provide one.  Or if it was looking for a "gotcha" rally (i.e.- negative news generates a positive market reaction), then the same thing applies.  On the downside, 4527 SPX is the first level bears need to claim and hold, on the upside, the trend lines serve the same function.  Trade safe.