SPX and COMPQ: Trusting Charts While the World Burns

So SPX made it official with a new all-time high -- finally 100%-without-a-doubt confirming the expanded flat count from December 8, 2025. Worth mentioning that I never sketched even a single "alternate" bear count during the scary decline phase.  I did note that bear options couldn't be ruled out (nothing can ever be completely "ruled out" in the market), but I stuck to that expanded flat projection from start to finish -- which is easier said than done when the world is on fire and everyone is panicking.  But I've done this for so long that I trust the charts over the news.

SPX reached the "?" on the chart, but as I noted last update, countertrend trading here would be like "stepping in front of a freight train" and that remains true for now:

A couple interesting charts that are worth reviewing, starting with this one (worth rereading the old annotation from 6/13/26):

Next, just a reminder that the ~9000 SPX target remains LIVE until proven otherwise:

Finally, COMPQ also made a new all-time-high:

In conclusion, what we need to know at this stage is that the more complex flat on the first chart remains "possible" for now, but the market has, as of yet, given NO SIGN that it's "probable."  We would want to see an impulsive decline and a sustained breakdown of the melt-up channel as first steps.  Otherwise, the trend is our friend, as the upside potential remains enormous.  Trade safe.

COMPQ and SPX: SPX Finally Fully Confirms Pattern from December

On Monday, I noted that the opening gap down could still land inside the green melt-up channel, and that if bears couldn't break down below that channel, then the gap down wouldn't mean anything.  

They didn't even come close.

COMPQ has continued rallying and now reached a "sneaky" potential resistance zone:

In conclusion, SPX has now confirmed the expanded flat from December 8 on a technical basis, if not yet on an emotionally-satisfying basis (new highs would be more emotionally satisfying!).  It's very close and ideally will make it over, though the rally is a bit extended at this point, so we could see a pause and correction soon.  If that happens at all, it would currently be expected to be just that -- a "pause" (not the end) -- but if that develops into an impulse down, then we'll look at the implications as needed.  Trade safe.

SPX, COMPQ Updates -- plus What the Strait of Hormuz Really Means to Oil and America

There's a ton of incorrect information circulating about what the Strait of Hormuz actually means for America, and for oil markets in general. So let's clear some of that up using a series of bullet points (note: I posted this same list on X if you want a ready reference page that's easy to quote-tweet):

• The biggest destination for oil that passes through the Strait is China, followed by other major Asian importers (India, Japan, South Korea, etc.).
• For 1H25 (First Half of 2025), ~89% went to Asia.
• Only ~11% went elsewhere (Europe, USA, rest of the world).
• USA alone ≈ 2.5%
• The Strait represented only about 7% of total U.S. crude oil/condensate imports, and about 2% of overall U.S. petroleum liquids consumption.
• Most U.S. domestic production is light sweet crude (WTI being the major benchmark).
• A major reason we still import anything at all through the Strait is sour crude.
• Canada is our main source of sour (along with Mexico and other Western Hemisphere suppliers).

The U.S. is far less directly exposed than many people assume. 

In 1H25, the U.S. imported ~0.4 million b/d of crude oil and condensate through Hormuz.

The reason the U.S. still imports Gulf barrels is not because America lacks oil. It's because most U.S. domestic production is light sweet crude, while many U.S. refineries still benefit from importing medium/heavier, sour grades.

So the main U.S. risk from a Hormuz disruption is price shock, not that American refineries suddenly “run out of oil.” 

The hardest-hit buyers are in Asia, with Europe also exposed, especially through price effects.

It's worth noting that not all Mideast oil needs to pass through the Strait:

• Saudi East-West Pipeline (Petroline): Design capacity expanded to 7 million bpd. Reports from March–April 2026 confirm it has been ramped up to (or near) full capacity to bypass the strait.
• UAE ADCOP (Habshan-Fujairah): Capacity 1.5 million bpd, with potential to surge toward 1.8 million bpd.  

But what about fertilizer?

U.S. nitrogen fertilizer production is heavily tied to domestic natural gas via the Haber-Bosch process, and the U.S. produces most of the nitrogen fertilizer it uses. But globally, a Hormuz disruption could still drive up LNG prices, squeeze ammonia and urea exports, and raise fertilizer and food costs, especially for import-dependent countries. The bigger risk is not that the U.S. “runs out” of fertilizer, but that the rest of the world faces another input-cost shock -- and that could bleed back to us through the global economy.

U.S. sectors that could do well in the event of a prolonged closure include LNG, oil, agriculture, and fertilizer exports.

The downsides are more obvious -- but it seems everyone is talking about those (real or imagined), so I don't feel the need to rehash all that in great detail here.  Just sign onto X for five minutes and you'll see people predicting everything from "global depression" to "energy crisis" and more (for the record, I don't see this leading to a U.S. energy crisis -- we have too much domestic oil and the government always has "export bans" as a card of last resort if it ever came to it. High import nations are another matter and could very well face localized energy crises.).  But a few of the more likely "negatives" that come to mind are: consumer inflation (higher gas, heating, diesel, etc.), potential global demand destruction, and the fact that while the U.S. is very well insulated, it is not "100%" insulated, so some short-term pain wouldn't be out of the question.

Market-wise, not much happened on Friday, but futures are indicating a minor gap down this morning, though about half of the opening futures gap has already been recovered.

The opening gap may still land within the green melt-up channel, so bears will need to keep pushing to turn it into anything.

COMPQ is still above its intermediate lines:

And finally, SPX bounced solidly off its intermediate trend line:

Not much else to add beyond that.  Trade safe.

SPX, COMPQ, INDU: Charts Lead the News, Part #2,785 of ∞

Since last update, SPX has continued melting up higher.  It's interesting to consider that the C-wave target went on our radar several weeks before Christmas, long before the war in Iran, long before the "ceasefire," long before anything in the current news cycle... and it seems to have predicted all of it with uncanny precision.  This is why I've long argued that charts lead the news (and its corollary: news is noise).  This is also why I never joined in on all the panic -- the charts never gave us a clear reason to panic.

Now, what would be most interesting here -- and I'd be tempted to say I might even lean this way if it weren't unpredictable (corrections aren't impulses, so they have higher variance) -- would be this:

[yes, there's a typo on that chart: an extra "make" -- I'll fix it next update]

Again, I'm not predicting that's what will happen, because nobody can make that prediction here.  But it is a technical possibility, and maybe one with higher odds than normal in circumstances such as these... so we'll keep an eye on it.

Next up, INDU has bounced like a superball off its green target, after capturing it right on the nose:

Finally, COMPQ is above its key resistance, for now:

In conclusion, bulls are within spitting distance of completing this pattern -- of course, we can't just assume they will, there's always the possibility of something like a WXY (with C being the bottom of W) -- and they still have another minor black line and red to clear -- but they really can't complain about their position.  

Frankly, even if they never make it, the fact that the C-wave inflection zone worked as well as it did -- alerting us months in advance that a tradeable bottom was a reasonable probability in that zone -- is a huge win either way.  Trade safe.

SPX, COMPQ, OIL -- and a Rant on Cognitive Bias

Humans have a persistent, predictable bias: we overweight outcomes we can see and underweight outcomes we can’t. The reason is obvious: immediate, visible consequences feel real, while distant, abstract consequences do not.

That is why people still smoke, eat badly, skip exercise, and ignore slow-building risks in general. They may “know” there are consequences in some abstract sense, but without immediate feedback, those consequences are easy to discount.

This bias also helps explain why politics is so dysfunctional. Many serious problems develop slowly, remain mostly invisible until late in the game, and impose no obvious pain in the present. 

Social Security is one example: we’ve known for decades that its finances are structurally strained, yet meaningful reform keeps getting deferred because the problem still feels distant to most people. Most likely, because of our cognitive bias, nothing will be done until the 11th hour.

Imagine these two scenarios:

In the first, you walk into your bedroom, see a bomb, call the bomb squad, and they disarm it. You’re incredibly grateful. 

In the second, armed men kick in your door at 1 a.m., drag your family out of the house, terrify your children, damage your property, and leave without explanation. You’re furious. 

You carry a grudge against these men for years. Until one day, you finally learn the truth: There was a bomb under your bed and they saved your family.

That is the problem with prevention: when the danger is invisible but the intervention is visible, people often resent the rescue. Preventing a disaster no one saw and that never happened rarely earns gratitude. Worse, if the preventive action is disruptive enough, it can even make the rescuer look like the villain.

Which means there's an asymmetrical social and political payoff for waiting until things are dire. 

Politicians are rewarded for managing visible pain and punished for imposing visible costs to prevent abstract future pain.

For that reason, politicians are incentivized not merely to ignore future problems, but to avoid taking painful, visible action against risks the public still experiences as abstract. 

So it’s always worth considering what kind of political behavior we, the electorate, are actually rewarding. If we punish prevention and reward delayed reaction, then we should stop acting surprised when politicians wait until after the fire's already raging.

*****

Market wise, bulls obviously aren't entirely out of the woods yet, but it's looking increasingly likely that wave C of the expanded flat we've been tracking since December 8, 2025 has indeed bottomed.

There's another option not discussed on that chart, which would be that the last bottom was a larger B-wave -- which would see a rally back to the all-time high and then yet another return to recent lows.  I'll cover that in more detail if it becomes appropriate, but there's the head's up.

COMPQ is likely going to shoot back above its resistance zones at the open.  Bulls will, of course, need to sustain that breakout:

Finally, I hinted at this possibility in oil in the prior update, but I think I've talked myself into very slightly favoring it.  The last low has been bothering me, because it just doesn't look like any sort of C-wave -- it's looks corrective, like the b-wave I've labeled below.  This would mean the spike wave wave c of an expanded flat to complete the larger b-wave.  Note that this count, if correct, could indicate another year (or even many years, if the blue abc is just wave A of an even larger flat!) of low oil prices.  So I thought it was worth warning about this now:

In conclusion, bulls are doing what they needed to do and the C-wave low is looking more likely.  Bears do still have a couple of "last lines of defense," but they'll need to make a convincing and fairly immediate stand to undo the damage they're going to take at the open.  Trade safe.

SPX and COMPQ: A Fair Number of Marbles

Interesting times.  Not a ton to add since last update, but SPX has made some progress, clearing the falling black trendline.  Red remains its next hurdle:

COMPQ is back-testing its intermediate and long-term trend lines:

In conclusion, there are a fair number of market marbles riding on these tests.  If SPX and COMPQ can sustain breakouts back over resistance, there's a good chance the decline is over.  If they're rejected at these back-tests, then the market would be signaling that bears are, at least for the moment, waking up.  Trade safe.

SPX, INDU, COMPQ: What Bulls Need to Do Next

Last update noted it would be okay if SPX fell back into its target zone again as long as it didn't sustain trade below it.  While it did trade briefly below it, it then bounced immediately.  The question now is whether this is finally a lasting bottom, so let's outline what bulls would need to do to signal that.

The first near-term goal is for SPX to sustain trade north of the falling black trend channel:

Looking at it from the other direction, bears still want to see sustained trade below blue:

INDU is also bouncing off its target:

COMPQ is in a kind of no-man's land.  Here, bulls need to get back above the three broken trend lines:

In conclusion, SPX and INDU captured their targets and bounced... but so far, SPX has only rallied back up to resistance.  It needs to clear black first, for bulls to signal they mean a bit more business.  If it can do that, then it will likely head toward next resistance: the upper red channel boundary (first chart).  If it can't, clear its resistance zones, then the extended C target will remain on the table.  Trade safe.