SPX, INDU, COMPQ: Three Charts and the Truth

Last update discussed the conundrum, today I want to drill down and use the charts to illustrate it, and to discuss some things that may help map the way going forward -- starting with INDU.  INDU's near-term pattern is one of the main things keeping my bearish angels in check right now; the annotation explains why:

SPX discusses the options:

And with any luck, COMPQ may help point the way going forward:

In conclusion, those three charts probably say just about everything there is to say right now.  Trade safe.

SPX, COMPQ, INDU Updates

SPX hasn't really gone anywhere (except sideways) since last update, so we still have a situation where:

1. On the one hand, there are potentially enough waves up for a decent correction to begin from here.
2. On the other hand, the various indices all seem to be doing their own thing, so one can see whatever one wants to, based on which market they pick and their preexisting bias.

This lack of agreement between markets continues to make me uncomfortable from an analytical standpoint.  A look at the following three charts may help shed more light on why, starting with INDU:

Next, COMPQ:

Finally, a near-term chart of SPX:

We can see that INDU is flirting with a price point (not quite there yet, but close) where it would tend to imply the rally continues over the long run, though it does allow for a sizeable correction in the meantime.  COMPQ hasn't made a new high above the 5 label, but it's still unclear if it needs another 4/5 unwind.  Even SPX at a near-term level is about as clear as coffee.

So, at this point, I'll simply remind readers that we've had a solid handle on the market here for multiple months now -- but, as the famous Kenny Rogers song says, "You gotta know when to hold 'em, know when to fold 'em," etc.  Sometimes we just have to wait the market out for a minute, since the market (collectively) isn't behaving in a way that makes bold calls appropriate just yet, in my opinion.  Trade safe.  

SPX Update: Hitting the Pause Button

On Friday, I expressed some skepticism about the decline in SPX due to the recent behavior in NYA and INDU, and it turned out that skepticism was justified, as SPX then went on directly to a new high. 

Of note, INDU and NYA also went on to break their prior swing highs, which is probably not ideal for bears, but we'll see if they can hold those breakouts or not.  Be aware that if they can hold their breakouts, I'll probably have to publish a more bullish intermediate count (one I was already thinking of publishing, but that would seal it).

Because of all that, for the moment, I want to take us back to basics in order to keep us focused on the present:

That's the only chart I'm going to publish today, because when the market starts acting a little funky, it can be a good idea to step back from our preconceived notions for a minute and just watch and wait.  Trade safe.

SPX and COMPQ and NYA and INDU and...

In the prior update, I was leaning toward SPX and COMPQ still needing another high, which they both got.  Yay.  To boot, they then both reversed exactly as they should have, since that wave was expected to be a micro 5th wave to complete a larger wave.  Yay.  Again.

But then we have NYA and INDU and BKX (et al), which all rallied yesterday.  Normally, I like to see something approaching agreement between markets, especially near turn zones.  Because when every market is instead doing its own thing, it starts to feel more like a box full of agitated cats, and it makes me uncomfortable, like trying to sit on a bean bag chair filled with olive oil while dressed in a tuxedo and holding a box full of agitated cats.  In other words, it's hard for bears to declare any sort of confident victory just yet.  

Of course, all that could change tomorrow or Monday, if INDU and NYA were suddenly to reverse dramatically.  But that hasn't happened yet -- or, as Kamala Harris would say:  “So I think it’s very important... for us, at every moment in time, and certainly this one, to see the moment in time in which we exist and are present, and to be able to contextualize it, to understand where we exist in the history and in the moment as it relates not only to the past, but the future.”  

(I really wanted to use the altered quote there, because it's funnier, but she didn't actually say: “Today is today. And yesterday was today yesterday. Tomorrow will be today tomorrow. So live today, so the future today will be as the past today as it is tomorrow.”  No matter; the actual quote will suffice.)

Anyway, the point is, if I remember correctly, that there's not much agreement between markets right now, so bears might want to stay on their toes.

Below, we can see COMPQ did exactly what it was supposed to:

As did SPX:

But then we have INDU:

And NYA:

Put 'em together and what have you got?  Bibbidi-bobbidi-boo.  Which, in this case, actually appears to be roughly correct.  

So, in conclusion, this COULD be the start of a meaningful turn... but the lack of agreement between markets, at least "at this moment in time in which we exist and are present," fails to inspire confidence so far.  Accordingly, I'm going to pause a moment and wait to see what NYA and INDU, etc., do next before slapping numbers and projections on these charts.  Trade safe.

SPX and COMPQ: So Much Depends Upon a Red...

Last update expected that SPX and COMPQ both needed at least one 4/5 unwind, and they both stalled and then made a new high, in line with that expectation.  But it's finally getting tougher now, for reasons we'll discuss below:

When we study the above chart, we cannot help but be reminded of the famous poem by William Carlos Williams Carloses:

so much depends 

upon 

a red wheel  number

barrow iii

glazed with rain 

water

beside the white 

chicken nuggets

The moral of that poem, of course, is: It's getting tricky around these parts now, so watch your back -- and please check the bottom of your shoes before entering the house (believe me, we have wild chickens all over our yard here in Hawaii, and they're not just the cute decorations that William Williams makes them out to be).

COMPQ is in a similar boat:

Also, Stockcharts is on that weird kick again where it deletes all my prior annotations every time I try to add a new annotation, and it's been doing that literally since I first annotated the above chart.  Since I'm tired of re-typing them, I took a screenshot before I edited the chart, so here they are for anyone who reads legacy annotations:

Anyway, we can see from COMPQ and SPX that it's probably a bit more likely that there are still new highs out there and thus that it may be premature to start publishing the chart below, but I'm publishing it anyway, because it's worth keeping in mind:

In conclusion, while it's probably slightly more likely that new highs are still lurking (have I mentioned that yet in this update?), we are getting into "this thing could end whenever it wants" territory.  That said, because of the possibilities of a fifth wave extension (and similar), I continue to advocate waiting for an impulsive decline before getting too aggressively bearish.  Many a bear has been burned by that final fifth wave, which usually runs stops and looks bound to go to the moon before reversing (of course, many a bull has been burned for the exact same reason) -- so my broader point is, while these updates have had a solid handle on the market's intentions going back several months now, this is where I tend to start to lean toward more of a "wait and see" approach.  Trade safe.

SPX, COMPQ, and Shoes

Last update prognosticated:

What we see on both charts is three waves up (so far) off the recent lows, which suggests that this is (most likely) not yet a complete rally wave. An alternate potential to remain aware of (for the next session or two, anyway) is for those three waves to mark yet another b-wave high, which would reverse back toward the right-most "IV?" on the COMPQ chart, before rallying again. Given the strength of the rally so far, that seems less likely, but it is still technically possible... At this point, it appears to remain bulls' ball, for now, with at least one micro fourth and fifth probably still needed, possibly two.

Friday's market obliged, and it's worth mentioning that the b-wave high option appears even less likely after Friday's continued rally. 

I've added a few "rough" spec labels to COMPQ as a visual aid (don't take these as gospel):

No material change in SPX yet, either:

In conclusion, not much else to add to recent updates.  Trade safe.

SPX and COMPQ: No Surprises

SPX continued rallying on Wednesday, bringing the pattern I thought I was seeing (originally on June 24) to a more satisfying fruition.

Since the chart above references COMPQ, let's look at that chart before we talk further:

What we see on both charts is three waves up (so far) off the recent lows, which suggests that this is (most likely) not yet a complete rally wave.  An alternate potential to remain aware of (for the next session or two, anyway) is for those three waves to mark yet another b-wave high, which would reverse back toward the right-most "IV?" on the COMPQ chart, before rallying again.  Given the strength of the rally so far, that seems less likely, but it is still technically possible.

In conclusion, thankfully, no surprises over the past two weeks, so we were able to avoid bull and bear traps during the sideways mess.  At this point, it appears to remain bulls' ball, for now, with at least one micro fourth and fifth probably still needed, possibly two.  Again, though, once V finally completes, there is potential for a larger correction -- though I do still continue to advocate awaiting an impulsive decline as opposed to trying to front-run this wave.  Trade safe.