SPX and INDU Big Picture and Near-Term: Nearing the End of the Grind?

Last update covered the near-term options.  Until something big happens, there's just no change to the big picture.  

As a reminder, first near-term support is purple, then red:

 First meaningful intermediate term support comes at blue/black:

As long as those intermediate levels hold, SPX ~9000 will remain a live possibility:

Okay, back to the near- term.  INDU is near resistance:

And SPX is keeping open the option of an expended flat, with a potential ending diagonal forming near current levels.  IF this is an ending diagonal, there are currently enough waves up for it to be complete or nearly so.  First step for bears would be to sustain trade south of the red wedge.  Such a breakdown would NOT "guarantee" a diagonal -- it's simply the first hurdle bears would need to clear to even seriously consider a diagonal:

In conclusion, the market has been chewing sideways for months now and just hasn't been a great market for anyone trading shorter time frames.  We could be nearing the resolution of that soon (relatively speaking) though.  If this is a diagonal, it will make a quick trip back to the November lows; while, if this is a bull nest, it should start breaking out soon.  Either way, it may get interesting again.  Trade safe.

SPX and INDU: Some Near-term Charts

Last update focused on the big picture -- and no change there (as has been the case for many months now) -- so let's look at some near-term charts today.  

Starting with SPX:

Next, it's at least worth being aware of the approaching trend line in INDU:

In conclusion, SPX and INDU are both near overhead resistance, so that's worth keeping an eye on for the near-term.  There's another market I'm watching very closely here that's in the ballpark of an inflection zone, but I'm not going to bring that up unless it become relevant.  We'll see how the market reacts here -- but long-term, there's still nothing to indicate bears have come out of hibernation yet.  Trade safe.

SPX Update: Frozen Winter Market

Well, 2026 is upon us already, so Happy New Year to everyone.

Last update was just before Christmas.  On a closing basis, SPX has moved a grand total of 24 points since then.

It did manage to make a new high in-between, as expected, so that's nice.

As I ran through my chartbook tonight, all I could think was Gosh, what an exciting market. 

Given that the near term has been nothing but chop for a long time (as just illustrated), we're going to focus on the big picture today.

The first key chart remains the chart below.  As long as SPX keeps holding the blue and black breakouts, then bulls remain in charge:

The next chart shows why SPX has been stalled in this area: it's facing a long-term resistance trendline. So far, it's been bouncing around on either side of it, which isn't particularly revealing. If it can sustain trade above this, that would be a continued good sign for bulls:

In conclusion, it's genuinely impressive how little has happened in the past few weeks.  Old trader wisdom claims we should "never short a dull market"... so worth keeping that in mind.  Trade safe.

SPX Update: Merry Christmas to All, and to All a Good Night

Christmas week is upon us, which means that 2026 is just around the corner, which means we finally get the flying cars we were promised in 1980s sci-fi movies.  At least, that's what I'm hoping.  Given that we were basically promised those by the early 2000s, I feel like we've waited patiently for long enough now.  2026 will officially put as past the quarter century mark.  Which means: it's time.  I, for one, plan on writing my Congressional leaders to demand Flying Cars for 2026.  No more flimsy excuses and bureaucratic red tape!

Market-wise, last update noted that bears would need to sustain trade below 6720 to get things going, and so far, they've failed to do that -- meaning I don't need to change Friday's annotations:

Bigger picture... I basically never do this, but a reader called it to my attention that what I'd written on Friday's chart about "lower red" could mean a different red line than I had in mind, so I adjusted Friday's annotation in the interest of clarity:

In conclusion: Right now, there's nothing particularly bearish about the charts, but it's worth knowing that even if SPX makes a new all-time high soon, the complex expanded flat will remain an option for a time, until SPX sustains trade above the all-time high. Again, the complex flat (first chart) is not a prediction -- just an option the market can take if it wants to throw another curveball.

Wednesday is Christmas Eve, and as has been my long-standing policy, I'll be taking Christmas Eve though New Year's off from the updates (barring unusual circumstances, those are really the only days I usually take off for the entire year) to spend time with family.  Since Jan. 2 is a Friday and I have family on island from the mainland (through mid-January, actually), I'm going to take Jan. 2 off as well and the updates will return on Monday, Jan. 5.

Which means, this is where I wish all my readers a Merry Christmas and a safe and prosperous New Year.

It's also become a long-standing tradition to link to a nonmarket piece: A Christmas Story: Reflections on What Matters -- which, for those who haven't read it, is a memoir piece I penned (12 years ago now) about my mother's untimely death. 

Thanks for reading.  Thanks again to those of you who support this publication -- you are genuinely the ones keeping this whole thing going.  Have a pleasant holiday season -- and please drive, trade, and be safe.  Merry Christmas!

SPX Update: It's a Wonderful Knife

Christmas is almost upon us, which means that every time a Fed governor mentions the Fed's "tools," an angel gets its wings.  (This is, in fact, the reason why the quality of flying angels has fallen off so severely in recent years. The Fed has overused the word "tools" to the point that, by necessity, they're now handing out wings to anyone who's not visibly wielding a pitchfork.)

Chart-wise, SPX briefly broke its key lines, but recovered both quickly:

A wider view:

In conclusion, bulls can still recover it here and head to new highs -- but in the event SPX sustains trade below the recent low at 6720, then we'd watch the lower red channel boundary on the second chart while keeping the complex expanded flat from the first chart very much in mind.  Trade safe.

SPX Update: On the Nose

Since last update, SPX did what it was expected to do. I'd noted that if bulls couldn't recover red, it was likely to test purple -- and it tested it on the nose:

The purple trendline on the chart above roughly aligned with the near-term red horizontal I'd called attention to back on the 10th, which got tested in concert with purple:

SPX has bounced from these support zones, so bulls may be able to run it back up to a new high from here.  In the event they can't, then the falling blue line on the near-term chart would be the next zone to watch... and if that were to break down, then we'd have to keep the black complex expanded flat on the table.  Trade safe.

SPX Update: Two Weeks of Nothing

SPX has literally gone nowhere since the start of December, so we've had two weeks of running in circles and not much has changed:

On the intermediate chart, SPX did crack below the old red trend channel, so bulls would like to recover that ASAP:

In conclusion, there's just nothing to add when the market runs sideways for two straight weeks.  The only new observation worth making (additional to all the other observations I've already noted over the past two weeks) is that SPX is below red on the second chart.  If bulls can recover that directly, then nothing doing -- but if they can't and SPX sustains this breakdown, then we should keep an eye on the purple trendline next.  Trade safe.