Prologue

"A great civilization is not conquered from without until it has destroyed itself from within."

--Historian Will Durant

"The price of freedom is eternal vigilance."  --Aldous Huxley

The problem is always this:  Dangerous societal trends typically start small.  When problems are small, most people either don't see them, or don't view them as any kind of threat.  Of course, part of wisdom is seeing things not merely in terms of what they are today, but in terms of what they will become in the future -- seeing them as seeds that can grow into something larger.  Yet conveying this to others can be challenging, because:

1. "It's just a tiny problem!  You're making a mountain out of a molehill." -or-
2. "That's not a problem at all!  That's a GOOD THING."

This is how it will always be.  Yet once the trend has grown so large that everyone can see it, it's already massive and powerful, and thus too late to stop it.  

By the time everyone sees, the crisis is already upon us.

Our best chance of stopping a trend is, obviously, when it's still small and weak and lacks momentum.  But ironically, that's also when we're least likely to be able to rally any support for stopping it.  The problem is weak; but the probability of rallying a coordinated defense against it is even weaker.

This amazes me, because almost everything in life works this same way.  For example:  If we find termites in our home early and call the exterminator, we can stop them from doing too much damage -- but if we ignore them until they're "obvious" and can no longer be ignored, that means much damage has already been done.  Exterminating them and restoring the house to sound condition will be a much more difficult endeavor.

Almost everything that is now large had to start small.  Yet we, as a society, seem to repeat this mistake endlessly.  We can't seem to identify the enemy -- not because it's invisible (it's quite plain) -- but because it is small.

That's going to change.

Not overnight.  But as a parent whose children have not yet made their ways in the world, far too soon for my liking.  

We'll talk more about all this later.  

The price of freedom is eternal vigilance.

SPX Update: 2021 Arrives

As those of you who own calendars are no doubt already aware, 2020 is officially over.  Will things improve in 2021 -- and does it even matter to the market whether they do or not?  Our overlords seem intent on doing everything they can to create inflation, with everyone tripping over each other to see who can come up with the largest "stimulus" packages (and recall that inflation can be bullish for assets, including equities).  This is likely the fifth wave of a dying empire, so I'm sure our vaunted leaders will take us out with a bang -- while our criminally-undereducated masses cheer them on the entire way.  The handful of us who object will be branded as heretics and "deniers," especially since things will probably seem to be working... for a time, anyway.

Point is, money printing and debt and inflation, and all the things that ultimately lead to collapse, are actually insanely bullish for a while.  The problem is not that they don't work for a time, it's that they're not sustainable for the long haul.  Nor can they be easily recovered from.  Life is a constant negotiation of the present against the future (we must always consider how what we do today will impact us tomorrow), but increasingly, our politicians and the populace only care about what happens in the next five minutes, and "tomorrow" is rationalized away with magical thinking.

Anyway... a discussion for another time, perhaps.

At this point, SPX is again threatening the intermediate trend line. 

Near-term, the blue trend line seems to be the relative proxy for the IT trend line:

In conclusion, bears have one last shot here, at an ending diagonal, which would head-fake over blue (chart above) then whipsaw -- but if SPX can break out and sustain that break, then bears might want to stand aside for a while.  We'll see how it goes.  Trade safe.

SPX Update

 I have to take my middle son for a doctor's appointment early this A.M., and there's been little change since last update, so brief update today.  SPX is right against the IT resistance line again:

And against the comparable near-term line:

If it can't push through on this trip and gets rejected, then it would probably visit the C1 zone again.  If it can sustain a break out over, then it may have some room to run up toward 3790-3800 next.  Next time we talk will be 2021, so have a safe and prosperous New Year.

SPX Update: Pinball Wizard

Since the start of December, this market has been about as interesting as reading a washing machine instruction manual.

For the past couple weeks, I've warned that bears would need to break through the C1 support zone to get anything going, and, after testing that zone again last Monday, futures have now bounced back up to the all-time high.

The bounce will take us back to the intermediate trend line again.  We'll see if bulls can get through it this time, or if bears have anything left in the tank.

In conclusion, for most of December, it's been market pinball between intermediate resistance and near-term support.  As I wrote previously, the more often a level is tested, the weaker it becomes -- so we'll see if anything changes on this run.  Trade safe.

SPX Update

Last update noted that the C1 support zone was still the first zone bears would need to break, and despite a scary overnight collapse in futures, that zone held for both futures and cash.  That remains the first zone bears would need to get things going:

On the flip side, SPX continues to wrestle with near-term resistance.  On Monday, I noted in real-time (in the forum) when SPX reached 3703 that 3703-13 could offer resistance, and SPX has been stalled there ever since.  That, of course, doesn't mean it will never get through (almost nothing is permanent in the market).  In the event it does get through near-term resistance, SPX bulls must then sustain a breakout over intermediate resistance:

In conclusion, the next meaningful zones appear to be 3636 on the downside (near-term) and, of course, (still) the upsloping IT resistance line on the upside.  Trade safe.

*****

On an ancillary note, Christmas is nearly upon us, and, as is now tradition around these parts, that means it's time to link to my (now legacy) piece:  A Christmas Story -- Reflections on What Matters

Friday is Christmas; next update will be Monday -- so I'll close out this week by saying:  Merry Christmas to all, and to all a good night!

SPX Update: Resistance Strikes Again

Well, bears managed to defend intermediate resistance yet again, as on Sunday night/Monday morning, ES (e-mini S&P futures) dropped down toward 3600.  At one point, ES was waterfalling, but it found support a few hours before the cash open, and has since bounced nearly 60 points (and could, of course, be more by the time this is published).  Not coincidentally, ES found support in the C1 zone discussed last update as the first target in the event of a rejection at intermediate-term resistance:

Near-term, the chart is still a complete mess.  

In conclusion, SPX was again rejected at intermediate resistance, but bears will still have to get through near-term support to get the tide turning more significantly in their direction.  On the bull side, one might suspect that if the market recovers back to intermediate resistance again, then it might finally get over.  There are still multiple options on the table, so we'll see how it goes from here.  Trade safe.

SPX Update: Long-term, Intermediate-term, and Short-term

I tend to publish my long-term charts only occasionally (because they are, you know, "long term," so they don't need to be updated often).  Basically, I only update them when it's relevant to do so -- but I've found that sometimes readers get confused about where we are in the big picture, so today we're going to lead with the long-term chart.  

Keep in mind that, given the massive degree we're dealing with (SuperCycle), the market has a lot of room to wiggle, so don't get too married to exactly where 5 is shown.  At this stage, the big picture chart is more of a compass than a roadmap.

Near-term, SPX held C1 and rallied up nearly toward its next target zone:

Intermediate-term, SPX is again challenging resistance.  Keep in mind that the more often a level is tested, the weaker it gets.  This is why the most valuable levels (for a trader) are the levels we identify BEFORE the market reaches them (of course, that's also when it's hardest to act at those levels).  For example, on the chart below, I first called attention to black intermediate resistance in August.  SPX then rallied up and tagged that line at 3588.  SPX then proceeded to be rejected to the tune of nearly 400 points.  We saw the level in advance, and that first tag after we identified that zone was also when it had the most value.

In conclusion, SPX is again challenging intermediate resistance, but it's challenged it so much that it's certainly weakened the zone, so we'll see if bulls can break through it now or if they get rejected again.  Trade safe.

SPX Update

Not much has happened since last update -- in fact, the market is in nearly the same place (price-wise):

So, of course, nothing has changed yet regarding the intermediate trend line:

In conclusion, the market has yet to make up its mind as to whether it wants to continue to rally in the previously-discussed potential third wave, or decline first in a corrective C-wave (before likely rallying again afterwards to resolve what would presently appear to be a B-wave high).  Trade safe.