SPX and NYA: Better Nate than Lever

This is the start of Thanksgiving week and traditionally, this is one of the most bullish weeks of the year on a seasonal basis -- so that's worth keeping in mind.

Last update discussed the possibility that the decline had done its job and completed or nearly completed, and the market did manage to hold the recent lows during Friday's session.  It has not yet broken out of its near-term downtrend, though, so that's the next test for bulls:

In SPX, I probably should have mentioned this (see chart annotation) in the prior update but forgot -- and "better Nate than lever" as the old Dad joke goes:

Bigger picture, the zone around black still appears to be the next reasonably significant downside price point:

In conclusion, it's worth reiterating the close from Wednesday's update, because for now, it remains the most germane feature of this market:

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of a seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

Not much to add beyond that.  Trade safe.

SPX and NYA: SPX Captures First Target

Last update argued that 

"Near-term, the Occam's Razor chart interpretation suggest further lows will occur."

and closed with: "Near term the decline probably isn't done yet."

And that proved to be a big hit.  SPX captured its first downside target -- and NYA came very close to capturing its target as well:

Let's look at what is currently my (slightly) leading interpretation for SPX, based on the apparent 3-wave nature of the most recent all-time highs.

Bigger picture, the diagonal invalidation is below the black trend line, so that keeps things reasonable:

Essentially, if I were a bull, I would be VERY cautious in the event the diagonal's KO (2nd chart) is overlapped more than briefly.  Yes, there are always other iterations of a diagonal to be drawn, but this is an imperfect world and sustained overlap there would be a classic big warning sign.

To quote what I wrote in the prior update (note that we got the new lows already -- this is more for the remaining sentences beyond that point):

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of a seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

So, in conclusion, most markets would look better with new lows -- so near term the decline probably isn't done yet.  And, even if it is part of a corrective wave -- which is currently the most likely potential, but never a "guarantee," especially coming at the tail of a possibly-complete 5 wave rally (as mentioned above); again, this does make this less certain than our usual b-wave highs -- expanded flat c-waves can sometimes extend far beyond typical targets, so this isn't a great time to be complacent if you're a bull. 

I couldn't have said it better myself.  Trade safe.

SPX and NYA: Bull Case/Bear Case

There wasn't much to add last update, but I did note:

Near-term, SPX is still holding the recent swing low, though it did dip below red again -- which can sometimes be a sign that buyers are running a little thinner, so bulls should stay on their toes here.

That warning proved appropriate, and SPX has since gone on to break its recent swing low and close below the all-powerful red trend channel:

Near-term, the Occam's Razor chart interpretation suggest further lows will occur:

So I'm going to outline the bear case here, and then the counterargument.  The bear case is pretty simple and can be seen in the blue 1-2-3-4 on the first chart, suggesting the potential that the ATH completed wave 5 of that count.

The bull case is also simple, and is best illustrated by NYA's chart:

In fact, multiple markets beyond NYA appear to be three wave highs, which is the main thing holding me back from embracing an intermediate bearish viewpoint at this exact moment (subject to update if things change).  That said, it's an entirely different animal when an apparent b-wave high occurs in the middle of an seemingly-incomplete wave then it is when you spot one at the end of a massive 5-wave rally.  This is the case here (see "the simple bear case above), so it lowers the odds a bit, because options such as "failed fifth" enter the equation.

So, in conclusion, most markets would look better with new lows -- so near term the decline probably isn't done yet.  And, even if it is part of a corrective wave -- which is currently the most likely potential, but never a "guarantee," especially coming at the tail of a possibly-complete 5 wave rally (as mentioned above); again, this does make this less certain than our usual b-wave highs -- expanded flat c-waves can sometimes extend far beyond typical targets, so this isn't a great time to be complacent if you're a bull. 

Trade safe. 

SPX Update: No New Ground

Not much has changed since last update, since SPX didn't break any new price ground on Friday, so I recommend rereading that update if needed.

Near-term, SPX is still holding the recent swing low, though it did dip below red again -- which can sometimes be a sign that buyers are running a little thinner, so bulls should stay on their toes here:

Big picture, it will be interesting to see if the major breakout (blue, then black) gets challenged:

In conclusion, not much more to add since Friday.  Trade safe.

SPX, INDU, NYA: Getting Weird Out There

Last update intimated that bulls seemed to have reclaimed the ball and that was partially the case:  INDU and NYA both made new all-time highs, for example -- but SPX didn't.  The overall pattern is one of the more ambiguous patterns we've seen in at least a year (probably longer), so we'll discuss the options in a moment.

First up, INDU's near-term chart is flat-out bizarre:

SPX, while also a bit cryptic in the near-term frames, has performed phenomenally well if all you did was trade my intermediate trend lines:

Near-term, SPX captured its target from last update:

Maybe the closest chart I can find to a conventional and more readily recognizable pattern would be NYA:

Of course, if NYA reverses higher without making a new swing low, then it could simply be a bull nest.

In fact, let's take this opportunity to discuss the apparent options here:  

• One option was just mentioned (bull nest).  If recent lows hold, then it may be that simple.  
• If recent lows fail, then the slight odds-on favorite would probably be a complex expanded flat, with recent all-time highs being complex b-waves -- SPX and NYA's charts both outline the "common" targets in that case.
• The third option would be that things have gotten weird because the market is topping in a more significant manner.  Since we can't rule that out, bulls probably need to be cautious in the event things start breaking (much beyond the expanded flat targets noted above).  This third option is reflected in the chart below, which I published (again) about a week ago:

In conclusion, as we've just examined, the pattern is less than definitive from a predictive standpoint -- but we have a handle on the most likely potentials, so we should be able to track it as more data comes in.  Trade safe.

SPX Update: This is Why Bears Can't Have Nice Things

Recent updates have noted that, no matter what the market did next, it seemed likely that the all-time high was (at worst) a b-wave and hence not a lasting top (i.e.- still a bull market).  The market has rallied enough since then that now bears would need to reclaim 6631 to indicate they still had even the near-term ball:

Bigger picture, SPX has yet again rallied up to the blue trendline after whipsawing red:

In conclusion, for a minute, bears had some near-term fun -- but for now, bulls have recovered all the levels they needed.  Trade safe.

SPX Update -- and Bonus Sentiment Chart

So the market is into interesting territory now.  Last update noted:

While SPX is still holding red on the chart above, it has now overlapped its first meaningful near-term zone, suggesting the rally from last month's low is a three wave form.  This further implies it's either a b-wave high or part of an ending diagonal -- at least, those are the most likely implications (bull nest can't be ruled out yet; nor can "failed fifth").  If it's a b-wave high, the c-wave decline would be expected to reach ~6550 or below -- but then it would be expected to recover to a new ATH.  If it's part of a diagonal, it would be expected to grind higher again directly.

On the intermediate chart, SPX effectively held the red channel (after a brief whipsaw):

Near-term, this does keep all options open, though this bounce is not a bear killer (yet) and would still be in line with a bear wave (if this is a fourth wave bounce):

Finally, the chart below is interesting and probably doesn't need much explaining.  It tends to suggest that, while we could still be a ways away from a top, this rally can't go on forever:

In conclusion, SPX has now followed its prior three wave rally into the all-time high with a rather ambiguous decline.  Instead of getting lost in the minutiae of every squiggle, the most straightforward option is to keep using the red intermediate channel as the key pivot -- especially since that's been working for months now.  Trade safe.