SPX Update: Both Downside Targets Captured

Last update noted that we had a new "impulsive looking" decline -- and the market confirmed that and captured both its downside targets -- plus.

The chart below looks out a little further into more speculative territory, just so readers have an idea of some of the things we should be watching here next:

In conclusion, the near-term impulsive decline begot a second impulsive decline, as it normally should.  Now we're on watch to see if these turn into a still-larger impulsive decline (five complete waves).  Right now, it's still three waves down.  The upcoming sessions will be important, though I think bulls would want to be cautious if it sustains trade much below ~7330 in the meantime, even without a full five wave structure (see annotation on second chart).  Trade safe.

SPX Update: Not from Our Universe

Last update noted:

There are some early signs that maybe it wants a correction here (that's what prompted me to draw those potential support lines) but that's not guaranteed.

Those early signs did play out and the market declined.  Most of the time, I would expect another decline to follow.  You'll of course forgive me for being modestly gun-shy in the current environment.

Assuming that impulse is indeed wave A or 1 down, then the next targets would be as shown below:

In conclusion, we have a new "impulsive looking" decline, so we'll see if that gives bears a moment in the sun or if the market pulls the rug on them again.  Trade safe.

SPX Update: The Thin Red Lines

SPX has been grinding sideways up since Friday, so there isn't a ton new to say about it -- but I have added a few new horizontal support zones to keep up with the recent price action.

In the event the green channel breaks down, those will be zones worth watching.  Since we don't have any impulsive turns to draw projections from, this is about all we can do at this phase.

In conclusion, there's just not a lot to say about a market that behaves like this -- other than maybe: "market like this one are the reason trend channels were invented."  There are some early signs that maybe it wants a correction here (that's what prompted me to draw those potential support lines) but that's not guaranteed.  Trade safe.

SPX and Gold: Gold Worth Watching

I'm suffering through another birthday today, so this update isn't going to be ultra-detailed, but I do have some noteworthy info about gold.

After capturing its first downside target and a good-sized bounce, gold retreated down below the black trendline.  Gold bulls probably want to be cautious if it sustains trade down here because, as noted previously, that would put a test of blue on the table as a live option.

Of note, I realized today that Stockcharts had shifted the red trendline (something it sometimes does on its own on old charts with long time frames) -- I have corrected its location from the prior chart.  Red technically becomes the first zone on sustained trade below black, THEN blue.  The annotation has been updated to reflect this.

SPX is still in its uptrend, so nothing to add here for now:

That's about all the news that's fit to print at the moment.  Trade safe.

Gold and SPX: Gold Captures Downside Target

Gold has officially captured its downside target zone (4350-4400) from May 11 -- and is now bouncing off of that zone:

Bigger picture, the recent low in gold aligns with the red trendline.  As long as that line holds, bulls are in good shape.  If gold sustains trade below that, bulls will want to become cautious, because blue could come into play, particularly if this year's lows were to fail:

SPX has continued higher since last update:

In conclusion, gold captured its targets and SPX is still within its latest version of the green channel, so nothing much to add as long as those conditions continue.  If SPX sustains trade below green, that would be a sign that the uptrend might be pausing... but given how resilient this market has been, we'll have to play it by ear from there.  Trade safe.

SPX and INDU: INDU Back from the Dead

There have been whispers for a while now.  

"INDU," people said, usually quietly among close friends, "that used to be a market when I was young. Now look at it! Stuck below blue forever. It was fun while it lasted."  

But then, just as INDU was about to be permanently delisted from the Dow Jones Industrial Average (don't ask me how that would work, I just report the news), it broke above blue and made a new all-time high.

Moving on to SPX: in Wednesday's update, I wrote, "the odds are better than 50% that we now have an impulsive decline in place, though I can't entirely rule out an ABC structure."  I either assessed the odds wrong on Wednesday, or the minority percentage showed up.  

To be fair, by Friday, I was already reassessing those initial odds and wrote "INDU's new high forces more consideration of the ABC count."

And it turned out it was indeed an ABC decline.  I guess, considering that Wednesday was the first time I leaned even short-term bearish during ~1,000+ points of rally, that's an error I'm okay with owning.

I noted on Friday that the near-term rally off the red target line (the dashed horizontal line on the chart above) was forming an overlapping structure, which implied it was either corrective or a micro bull nest.  We should now assume it was indeed a micro bull nest, which implies the rally will need some 4/5 unwinds before the next inflection.  

That said, for the simple reason that expanded flats can show up unpredictably, we should also at least remain alert to the (almost always live) potential of the new high being a large b-wave with a revisit of the recent low in C.

Big picture, SPX has performed as expected:

In conclusion, Wednesday was a whiff and bulls retain the ball.  We're back to watching the green uptrend line and the next upside inflections.  Trade safe.

SPX and INDU: Murk-to-Murket

So of course, now INDU makes a new high -- at least, a new high for this recovery leg, if not a new all-time high yet.

That new high does at least open some questions in SPX:

Big picture, it might be worth keeping an eye on the rising green trend line as a simple support zone:

In conclusion, INDU's new high does add a bit more murk to the already less-than-crystal-clear water, so both sides probably want to stay on their toes until the picture clarifies a bit.  Trade safe.