SPX Update

Not much to add since last update.  SPX found support right where it was sketched on the chart, which fulfils the minimum requirements of a micro fourth wave:

Other than that, nothing to add to the past few updates.  As a reminder, the blue and red lines are first meaningful support, the overhead black line is next meaningful resistance.  Trade safe.

SPX and INDU: Interesting

 

First up, let's look at a version of the long-term INDU chart that we haven't looked at since March, mainly because I want to call attention to the large megaphone:

Near-term, we're probably not quite there yet... though I presently trust this market about as far as I can throw it, so I'm open to anything here.

In conclusion, we have some interesting things to watch heading forward, as this last bit of long-term peacetime prosperity unwinds.  Trade safe.

SPX Update: Downside Target Captured, and Support Then Holds

Today is 1/20/2021, which makes it an rare palindrome date (I have no comment about that, but thought it interesting).

Last update suggested that a trip to the 3760s in SPX wouldn't be unreasonable, but that we wouldn't look too much lower unless "red support" (chart below) failed.  Red support was then tested basically to the penny, and held.  Bears thus would still need to break support to get much more going.

Note that I have "4?" shown in gray -- this is because I'm not convinced this is wave 4 at the degree that's labeled (it was a bit short for that), so we might not be onto the larger 5 yet, but may still be in 3 (hence the higher blue "3?").

Bigger picture, we have indeed "hemmed and hawed" around the IT line, but that may finally change now that we've tested and bounced from support.

While looking through my chartbook, I also came across an old legacy COMPQ chart, which I found interesting:

In conclusion, SPX held support and COMPQ is also above a long-term trend line... as I've said for a while, IF these breakouts can hold, then bulls can run it notably higher.  To break things, the first level bears would need is now clearly defined at 3749.  Trade safe.

SPX Update

Last update noted that we appeared to have a potentially-complete five wave rally from early November (when five waves completes, it can mark a complete structure at the matching wave degree), and SPX seems to be acknowledging that inflection zone.

Big picture, SPX is still above the intermediate trend line, for now:

In conclusion, SPX has continued "hemming and hawing" around the intermediate trend line, but does remain above it for the moment, so bears have to respect that as long as it continues.  On another note, the market is closed on Monday, which gives me a long weekend from the updates, so I'll see you again on Wednesday.  Trade safe.

SPX Update

Last update noted that we could see some "hemming and hawing around the black line," and that's what we've seen since then.

Near-term, I parsed the wave going back to early November, and it does potentially count as a five wave structure within that time frame (not necessarily five larger waves since the September low, though).  More after the chart...

So... by "doesn't really fit," what I mean is that we wouldn't expect a third wave to show so much overlap... that suggests either it's a terminal structure that could reverse lower soon, or it's a subdividing third wave that could accelerate higher soon.  In other words, if nothing else, we can probably expect things to get a bit more interesting in the near future.  As long as bulls can sustain trade over the intermediate line, they're probably in good shape, but if they can't, then stay alert to the potential of a "surprise" correction.  Trade safe. 

SPX Update: No Change

Friday saw SPX back-test its most recent breakout (the blue trend line on the chart below), where it found support before rallying back up to new all-time highs:

SPX is thus currently still holding above the intermediate trend line:

In conclusion, we could see a bit more hemming and hawing around the IT trend line, but unless bears can whipsaw this breakout, there's no material change from the prior updates.  Trade safe.

SPX Update: IT Breakout

SPX has been fighting with IT resistance for months now, but finally seems to have cleared it.  Bears would need to whipsaw this breakout to maintain any hopes for the immediate future.

Near-term, SPX has finally spasmed its way up to capture the "if this is a third wave" target from mid-November:

In conclusion, after months of sideway-up consolidation, if SPX can sustain this breakout, it could be reasonably bullish for the foreseeable future.  Bears will need to whipsaw it fairly directly if they wish to keep themselves in the game.  Trade safe.

SPX Update: Head-fake, then Whipsaw...

Last update noted:  "bears have one last shot here, at an ending diagonal, which would head-fake over blue (chart above) then whipsaw"

And that's exactly what the market did on Monday.  Thing is, because of where it found support and the potential of a micro c-wave, Monday/Tuesday's action hasn't resolved any of the big picture questions yet.  Discussed further on the chart below (note: typo:  Should read "below 3660," not "below 3260"!  Thanks to Will in the forum for pointing it out!)

Intermediate term, we've been talking about this resistance trend line forever, it seems, and SPX still hasn't managed to sustain a breakout yet:

In conclusion, bulls aren't out of the running yet, but they do still need to sustain a break of IT resistance.  Bears need to first break 3662, then ~3640, but if they can, then they likely get to at least the zone near the pink trend line, if not below.  Trade safe.

Incidentally, I penned a short, slightly cryptic piece earlier, linked here.