SPX and RUT: The Charts in More Detail

Last update I mentioned that, due to the expanded flat I spotted in ES, I was still unwilling to commit to the bear case, and that turned out to be the right decision.  Wednesday saw SPX decline back to retest its presumed C wave low, and then bounce strongly.

This gets a little tricky now, because we are dealing with a corrective wave, and corrective waves do not need to follow the same narrow rules as motive waves -- which makes corrective waves less predictable.  We have a potentially complete correction at 2785, so the market can rally right on up past 2860 if it wants -- but it also has the option to form a complex correction if it feels the need.  Accordingly, I've outlined both options in some detail.

Let's start with RUT, as many of my readers follow and trade this index:

Moving on to SPX, we'll look at the detailed count first:

And the bigger picture chart, which is unchanged:

In conclusion, the market has done what it needed for a complete correction, but always reserves the right to form a more complex correction if it feels the need (it does complex corrections to draw out time and price, and to confuse participants).  Both options are pointed higher for the near-term, but we should approach the upside inflection point in the next session or three.  If we see an impulsive turn from that inflection zone, then we're prepared and already alert to the potential of a complex correction.  Trade safe.

SPX and INDU Updates

No resolution from the market yet.  Bottom line is bulls probably need to hold the recent lows:

INDU is presently three waves down from the high, but might suggest a bear nest on any sustained breakdown of the most recent low:

In conclusion, because of the potential expanded flat in SPX, I remain unwilling to commit to the bear case yet, but I'm not entirely closed to it, either.  The expanded flat potential is based primarily on a pattern that occurred last week in the e-mini S&P futures (ES), and sometimes ES can do screwy things due to leverage.  The bottom line is, if bulls can hold 2785, then they have a good shot at highs above 2860.  Conversely, if bears can sustain a breakdown at that zone, then it becomes "too many waves down," and the ball shifts to their court.  First potential warning sign for bulls would be a sustained breakdown of yesterday's low.  Trade safe.

SPX, NDX, INDU: Friday's Targets Captured; First Inflection Zone Reached

On Friday, I went "out on a limb" and called for an immediate 60 point reversal against Thursday's strong rally... and here we are, right at the 2800 target -- which is also an inflection zone

This is a little tricky right here, because we have some mixed signals from various markets, and while Friday kept bears in the game, the potential for an expanded flat still casts a shadow over everything.  Let's get right to the charts, starting with NDX, which has a pivot zone to watch.

NDX bigger picture bearish option is alive and well for now:

SPX closed right at its first target and inflection zone, essentially to the penny:

INDU continues to provide some hope for bears, depending on what happens today:

In conclusion, the market has reached its first inflection point.  While it's tempting to jump right into the bear camp, due to the potential for an expanded flat (i.e.- a "bear fake-out wave") I do want to see how the market reacts to this zone before doing so.  The next couple sessions should be important.  Trade safe.

SPX, INDU, NDX: Chaos on a Limb

Last update was looking for further downside, which we got... but due to yesterday's rally, the charts have been thrown into borderline chaos.  Despite that, I'll go out on a limb and make a clear call -- but I'll caveat by saying that my confidence isn't terribly high, and in the charts that follow SPX, I'll discuss why that is.

First, here's my "best guess," via SPX:

Two charts of NDX:

The second shows why, via classic TA, bears probably need a turn immediately:

Finally, INDU has opened up a few more options for itself.

In conclusion, I'd prefer to at least see a break of Wednesday's low (at least in SPX and INDU, not necessarily NDX) before too much else happens.  If bulls instead continue to sustain this breakout, then all bets are off.  Trade safe.

SPX, NDX, INDU: Bear Hope?

On March 4, I listed the potential resistance zones for SPX, and the second zone I called out was "2852ish."  Yesterday, SPX hit a high of 2852 directly on the nose, then reversed strongly.  This, combined with INDU (more on this in a moment) gives bears at least a fighting chance.

Let's get right to the charts:

NDX also stalled in its noted resistance zone:

And INDU looks like a three-wave rally -- so far.  If bulls sustain trade above yesterday's high and the February high, then all bear bets would likely be off for the very near term.  But as of this moment, it is what it is and has to be treated accordingly.

(Basically, if INDU sustains trade north of the 2/B label, then we might be dealing with those first three waves as a bull nest, i.e.- 1-2 up, i-ii up.  Until that happens, though, it looks like an ABC rally.)

In conclusion, this may be the best shot bears have had in a while.  No guarantees, but as long as bears hold the noted levels, we may see the near-term shift into their favor in the not-too-distant future.  Trade safe.

SPX and NDX Updates

The market is still flirting with resistance, which is layered higher throughout this current price zone.  I've detailed this on the NDX chart below, and presumably if NDX encounters significant resistance, then so will everything else.

Near-term, NDX bonked its head on the median channel again.  Keep in mind that if it does sustain a breakout there, it would commonly run toward the top of the channel, which is one of the reasons why we're treating the blue lines on the chart above as speculative until we see an impulsive decline:

SPX ran to a resistance zone that I outlined a couple weeks ago (on 3/4), the resistance zones noted beyond that are similar to those noted on the first NDX chart.

In conclusion, bears still have nothing definitive to sink their teeth (or claws?) into.  While the market is facing several resistance zones, we have to continue to presume the trend is up until we see an impulsive decline.  Trade safe.

SPX and NDX: Minor Inflection Point

Last update noted that "Bear C" appeared to be complete in SPX, which implied a new swing high was forthcoming, and SPX broke the prior swing high (2816) with ease during the session.  The charts also indicted resistance just beyond that level, and SPX proceeded to tag that resistance and has remained stalled since then.

On the chart above, we can see that, in the recent past anyway, this resistance zone has been fairly formidable -- SPX was rejected once here in October, twice in November, and once at the beginning of March.  The more resistance (or support) is tested, the weaker it becomes, because each time the market tests such a level, more sellers (or buyers, for support) are used up, theoretically leaving fewer participants to sell or buy that zone next time around.

NDX also tagged its noted resistance zone, and also stalled:

In conclusion, the market is testing an important resistance zone, which makes this something of an inflection point.  If bulls can power through and hold above, then they could get a new near-term lease on life.  If they can't, then we can't say the charts didn't warn of the possibility, and bears might get themselves a larger correction.  Trade safe.