SPX and COMPQ: Next Upside Target Just Overhead

Last update noted that multiple methodologies targeted higher prices in SPX, and the market has trended higher since, with the next upside target zone now just overhead.  ES (e-mini S&P futures) actually tagged the target zone on the nonfarm payroll number, then stalled, but presumably that zone will also be reached by the cash market (though very occasionally a target is captured by futures and the market deems that "good enough" with cash never following suit).

On a side note, to my recollection, every single nonfarm payroll of 2023 has ended up being revised downward.  In fact, last month's report was the same as this month's (187k) upon release, but now sits at 157k as of its most recent downward revision.  June was originally reported at 209k but was ultimately cut in half (to 105k) by its final revision.  Are the folks running this show really that bad at this?  Or is there a reason the revisions only go one direction (with the initial number being overinflated in the direction that helps the headlines)?  I mean, you'd think if it was just random "bad guesses," then they'd guess too low roughly half the time and occasionally have to revise a number higher instead of always "guessing" way too high for the headline.  But that doesn't seem to be happening in 2023.

COMPQ is, for now, comfortably back into the middle of its uptrend channel:

In conclusion, SPX appears likely to capture its next upside target zone.  Trade safe.

SPX and COMPQ Updates

Yesterday saw the rally lunge higher, so no real change from 8/21, when I noted we'd reached the three-wave downside inflection zone, and thus that bears would need at least one more wave down to make things more interesting.  So far, bears haven't been able to get that done, so the possibility that the prior swing low marked the end of a corrective decline remains on the table.

COMPQ still illustrates bears' conundrum:

I've drawn up an SPX chart noting some levels of interest:

In conclusion, there's nothing to indicate a larger trend change yet, so we'll watch to see if that changes or if bulls run with it.  Trade safe.

SPX and COMPQ: Support Still Holding

On Friday, after Jerome Powell came out and said something along the lines of "We're going to keep hammering at the credit markets until housing breaks," bears seemed to take an early lead -- but then their decline stalled short of the key levels and reversed higher for the remainder of the session.  

A week ago, I opined that the decline had formed "three large waves down," and the market has held that low ever since, which does mean that the most bullish possibility cannot yet be eliminated (the most bullish possibility is that the decline was a correction, and that correction is over).  Bears still need at least one more low to turn the decline into a larger impulse down, so the next key downside level has not changed from when I first discussed it on 8/23:

COMPQ has also continued to hold its key zone:

To the upside, the key zone for bulls remains the previously-discussed trend line:

Not much to update beyond that.  Trade safe.

SPX and COMPQ: Monday's Upside Inflection Target Captured

On Monday, I posted a "keep it simple" chart of SPX (and literally just now realized I uploaded another SPX chart where I was trying to upload NYA -- ah well, irrelevant) and discussed an option for SPX to rally back up to test a confluence that had caught my eye.  It did test that confluence, and was then strongly rejected:

COMPQ can also run into trouble if it sustains a breakdown below support and its recent low:

In conclusion, we can see that several major markets are implying the potential for big trouble on sustained breakdowns of support.  Now it's really just up to bears to make it happen.  And I suspect they ultimately will -- but as noted Monday, I do have to respect the potential inflection at the recent lows, which means that, despite my lean here, it's certainly not impossible for bulls to pull out a stick save and we should stay nimble accordingly.  Trade safe.

SPX, COMPQ Updates

Monday's update suggested that the market had reached an inflection zone, which meant a larger bounce was possible.  We did get some upside follow through, but then Tuesday retraced much of it.  We can see SPX's low came at a very old trend line, so that's going to be the next zone bears need:

We discussed COMPQ's trend line on Monday, and while it's not as old, the implications are similar:

Finally, SPX's "keep it simple" chart below.  SPX made it back into the red channel, but it's entirely possible that completed a three-wave rally, so bulls will need to clear Monday's high:

In conclusion, there are enough waves up from Friday's low to mark a complete corrective rally if the market wants, which means the upside level is fairly clear.  On the downside, there are multiple trend lines crossing Friday's low, so that level is even more significant (though, if it fails, always watch out for whipsaws and sudden snap-backs on the first breakdown, before the "real" move begins).  Trade safe.

SPX, NYA, COMPQ: Into an Inflection

There are a million ways to count the decline from this year's high, but in my opinion, it's now three large waves down (recall that three large waves down means two smaller impulsive waves connected by a corrective wave) -- the question is whether those three waves are complete yet (and it's terribly unclear; they could be, or not.  Neither would surprise me here.).  If they are, then a larger bounce would be in the cards now (see chart below).

The next question will be whether those three waves can go on to form a still-larger impulse down, which would in turn more strongly suggest an intermediate decline.  But let's not get too far ahead of things yet, as "the evil of the day" is sufficient to wrestle with for now.  Accordingly, I've tried to create something of an "all in one" chart with a focus on clarity for SPX:

An interesting companion to that chart would be NYA.  In the event NYA wanted to back test its broken red trend line, we can see how that would align nicely with a test of the confluence on the SPX chart above.  Of course, that's not a "guarantee" that the market will go that route, just something that would display some consistency across markets if it did:

Finally, COMPQ dipped below support, but bulls can still salvage things if they act quickly:

In conclusion, we're into an inflection zone down toward the SPX 4300 (+/-) zone, so we'll see how the market reacts here.  Again, in the event bulls can't pull things together soon, then things can get slippery to the downside.  Trade safe.

SPX, COMPQ, INDU: INDU Captures Both Downside Targets

It's time for me to bite the bullet here.  At least since August 4, I've been wanting to throw caution to the wind and proclaim the rally over, but are you kidding me?  Have you seen this market for the past 6 months?  No one in their right mind would ever declare the rally over, ever.  So I'm not going to do that just yet, but I will say I've been leaning that way for two weeks, and so far, the market is giving more and more reason to continue leaning that way.

Let's look at some charts.  

First up, INDU captured both its downside targets:

Turns out this VLT SPX trend line was a good one:

Next, NYA is close to overlap:

Here's one for the bulls:  COMPQ support just below.

And one for the bears:

In conclusion, I have no issue with admitting my lean is early (it was actually way early, but I didn't feel it was prudent to discuss yet), so the market could surprise and change its appearance to something more bullish, but so far, everything continues to align for bears.  Trade safe.