SPX Update: And the Beat Goes On

Last update noted that:

But again, so far, bulls are doing what they need to do and bears have been unable to accomplish much of anything.  Long-term, SPX is above its most recent breakout:

I then noted that SPX was also above its near-term support as well, and then closed by noting that the pattern suggested that when SPX broke away from the consolidation zone, it should move fast.

And yesterday, it did.  The next possible resistance zone is the blue median line (again), but I wouldn't be surprised to see SPX ultimately move through that, or at least bounce along the underside for a bit.  I can't guarantee that, it's just an "odds-on favorite" based on the lengthy consolidation we just had.

Bigger picture, the blue and black support lines will gain more significance the farther SPX moves away from them:

In conclusion, it looks like bulls still have the ball (no real surprise there) and the first step for bears NOW would be a sustained breakdown of blue and black on the long-term chart.  Trade safe.

SPX Update: C'mon Feel the Noise

A week ago, I wrote: "until there's a breakout or breakdown, pretty much everything in-between is noise."

And yeah, that's still the case.  But again, so far, bulls are doing what they need to do and bears have been unable to accomplish much of anything.  Long-term, SPX is above its most recent breakout:

Near-term, SPX is above blue support AND black support:

In conclusion, this remains a congestion zone that, so far, has been finding enough buyers to hold the market aloft.  The implication of such zones is that buyers and sellers have reached approximate equilibrium, so whoever gives first loses -- just be aware that can happen quickly (in either direction) when it finally happens.  Trade safe.

SPX Update: Asymmetric Information Conditions

SPX made a new high as anticipated in the last update, but this area is turning into a congestion zone (unless and until SPX breaks out or breaks down).  Because of this (and because of the micro pattern), we do have one meaningful change to focus on in this update:  The lower blue channel boundary can no longer be relied upon as a reliable pivot.  This is due to the potential that the market MAY be in the process of forming an expanded flat (it may not, but it's a live possibility, so we have to treat it as such):

In the event of an expanded flat, the black line above would be a reasonable zone to watch for support.  Of course, I can't promise we're in an expanded flat, but if the market were to decline from here, there would be questions about whether the all-time high is a b-wave.

Bigger picture, we're still below resistance on COMPQ (see last update -- no need to keep reprinting the same chart over and over), so this is still a long-term inflection zone and could ultimately resolve either way.  If it does ultimately resolve lower, the potential of 5 waves at higher degree mean it could resolve lower in a big way (not "immediately" as in tomorrow or anything, but over the next few weeks and months).

But it's still too early to say what the market is going to choose here, so we'll just keep watching and waiting for more clues.  Just be aware that another option is it could keep "congesting" in this zone for a while, burning through the last of the buyers -- and THEN turn into a decent bearish move.  Or it could break out and give an all-clear.  Ultimately, the "all clear" might be a more direct and obvious signal if it happens (it will rally over resistance and we'll be able to treat resistance as key support for stops) --  whereas if the bears take over, the market could be down 300 or 400 points before that becomes clear. 

In other words, the clarity of outcome isn’t equally distributed across possible futures -- so there's an asymmetric "future information state" at play here, and that's worth weighing into your decisions.  Trade safe.

SPX Update: "Back in Blue" (cue AC/DC)

Last update ended with:

the next thing to keep an eye on is the lower boundary of the blue channel -- if bulls can keep closing above it, the uptrend remains intact. 

And bulls indeed kept closing above it (in fact, tested it from above and it held) and look set to open today at new highs.

Bigger picture, SPX remains above this meaningful long-term confluence:

In conclusion, COMPQ (not shown) remains below its next long-term resistance level -- so there hasn't been a true "all clear" yet for bulls and this remains an inflection zone.  But that said, bulls are still doing what they need to do and bears haven't shown much gumption of late.  Trade safe.

SPX and COMPQ: SPX Testing Blue

Last updated noted:

SPX has now rallied up to the median line of the oft-discussed blue channel.  This median is the next resistance for bulls to clear

And the market was promptly rejected at that resistance level:

COMPQ was simultaneously hitting resistance, as noted for the past couple weeks:

And SPX has again tested this confluence from above:

In conclusion, the next thing to keep an eye on is the lower boundary of the blue channel -- if bulls can keep closing above it, the uptrend remains intact.  If SPX falls below Friday's low, then we could see it lose 100-200 points from here (for starters -- could turn into much more).  Trade safe.

SPX and COMPQ Updates: Is the Fed Well-Fed?

The market rallied again yesterday, despite rising concerns that the Fed will soon need a new Cook.  CNBC gave voice to the anxieties of many when it lamented that even the Fed needs to eat.

SPX has now rallied up to the median line of the oft-discussed blue channel.  This median is the next resistance for bulls to clear -- in the event they can sustain a breakout, they would have a shot at the upper rail, while a rejection could take SPX back toward the lower rail (sometimes it will land a touch of the lower rail by moving sideways for a time instead of sharply down).

COMPQ is still just below very long term resistance:

While SPX is above very long-term resistance:

In conclusion, as I've said several times recently, so far bulls are doing what they need to do.  The first step for bears remains "a sustained breakdown of the blue channel" (first chart).  Still not much else to add to the larger picture yet -- the market remains within a long-term inflection zone for now.  Trade safe.

SPX and COMPQ: Stuck in the Middle with Ewe

NOTE:  Monday's update contained a detailed addendum that's worth reading if you missed it: Why is the market rallying during QT? Whence Comes the Liquidity?

The bottom line with this market right now is that it's caught between major long term resistance and potential support.  The following charts illustrate this:  

Long-term SPX:

Long-term COMPQ:

In conclusion, we can see the conundrum in the charts -- in short, until there's a breakout or breakdown, pretty much everything in-between is noise.  Hence, I see no point in blathering on with endless speculation in the meantime, as that could in fact be counterproductive.  Trade safe.