SPX and NYA: Failing Support Not Terribly Encouraging for Bulls, Will the Fed Bail Them Out?

Despite what those of you who own Gregorian calendars have been led to believe, today is yet another Fed Friday.  This means the Fed gets to waltz out and make blatantly obvious statements that pundits can then quote with great excitement and fanfare -- as if the Federal Reserve somehow knows more about things than common dummies like you and me.  For example, Janet Yellen said that the pending British referendum on whether to leave the European Onion (EO) "could have significant economic repercussions," which is like saying that the surface of the sun "could be a place that would benefit from air conditioning."

The implications of Brexit are so incredibly obvious that even feral cats understand them -- but pundits love to run wild when Yellen says something like this, presumably because it means that even she gets it.  Besides, feral cats are a wholly disenfranchised segment of the population, so it doesn't really matter WHAT they understand about Brexit, since their oppressed voices are only heard late at night when everyone but me is trying to sleep.  And what I usually say to them is: "SHUT UP YOU FERAL CATS!"  So I readily admit to being "part of the problem" when it comes to their disenfranchisement.

Anyway, I'm not entirely sure how I ended up on that tangent, although I suspect that the feral cats currently howling near my back patio may have been a contributing factor. (I'm pretty sure that Maui's feral cat population is higher than its human population!)

Getting back to the market... er... getting TO the market, since we were never on that topic to "get back to," at least not today, there is currently nothing terribly bullish about the charts.  Let's start with NYA:

Next, let's look at three different charts of SPX and see if there's anything particularly bullish in them.  First is the preferred wave count from June 8, which still sees SPX testing 2000-2020 before the next real decision point occurs:

Next is the near-term SPX chart:

Finally, the big picture trend channel chart:

In conclusion, there's just nothing particularly bullish about support failing across multiple time frames.  Can bulls suddenly put something together and reverse the whole thing?  Of course, the market can change in a heartbeat.  But as of right now, there's no reason to think that will happen -- so unless bulls start putting together something more convincing (or the Fed comes out and announces something ridiculously bullish), I'm inclined to think SPX will AT LEAST test the 2054 +/- target/inflection zone (noted back on June 10), and probably test the 2000-2020 zone.  Trade safe.

SPX, BKX, NYA: Near and Intermediate-term Battle Zones

Last update noted that we had an impulsive decline from 2120, and suggested a first downside target/inflection zone of 2090-96, which was captured during Friday's session.  Interestingly, we bounced almost perfectly at both edges of that inflection zone:  first at 2096, then we dropped down to 2090 and bounced again.

I have a lot of charts to cover today, so let's get right to it.  First is NYA, which is a good representation of the broad market.  Notice that the broad market has gone essentially nowhere in the past two and a half years -- almost amazing to think about, when you consider the huge price swings we've had in that same time period.

Next is the SPX chart, which shows two potential counts.  Bears do have some work to do to get to either of these counts, as we'll see in the bigger-picture chart which follows this one.

I suspect bears will "git 'er done" in the end and at least reach the red C inflection zone shown above, but we do have to remain aware of the approaching support zone shown on the chart below:

Next is a chart of BKX.  This pattern has considerable bearish "potential energy," so if noted support fails and turns into resistance, we could see a decent sell-off ensue:

Finally, a near-term chart of SPX with some clues to watch as the upcoming sessions unfold:

In conclusion, I'm favoring the bears here, but I'm not oblivious to approaching support and the fact that the important battles have yet to be fought.  What happens in the immediately upcoming sessions is thus critical.  Trade safe. 

SPX, NYA, Crude Oil: What's 100% Gain Amongst Friends?

Things may be about to get interesting for bears again (finally).  While we closed yesterday's session only a few points off the 2120 high, we did so after an impulsive decline, and that means we should expect at least one more wave down of equal or greater length.  The next thing bears want to see is TWO more legs down (to create an even larger impulsive decline).  Even though that larger impulsive decline hasn't happened yet, because this first (small) impulsive decline has come from a massive intermediate inflection point, we should be on early alert to the potential that this may be the beginning of a much larger trend change.  

Near-term, the first downside inflection zone sits at 2090-96 -- if we blow through that zone, then bulls might want to sit this out until we see an impulsive rally.

It sounds funny to say this, but NYA's recent new high is actually bearish per the pattern I've been tracking for the past several months.  That pattern "needed" to see NYA make a new high beyond 10641, so with that out of the way (and Target 2 from March captured in the process), bears are now free to take this market back if they so desire.

I'd also like to update crude oil, since the last real public update I did for crude was back in January.  On January 13, I wrote the following:

From an intermediate standpoint, oil appears to have some fourth and fifth waves to unravel here, thus, due to the size of the overall waves, some very large "backing and filling" price swings may be forthcoming in the not-too-distant future.  Be aware that a large fourth wave does not need to unravel itself in the time shown on the chart above (i.e. -- this chart is not a "time projection") -- fourth waves are known for their complexity, and it would not be unheard of for a complex fourth at this degree of trend to unfold over the course of years instead of months.

I first published the chart below on January 11 in our forum, then published it publicly with the update on January 13:

It's actually somewhat ridiculous how well that chart has tracked, especially considering that the expected rally from blue (iii) to blue (iv) represented roughly 100% gain, and I didn't hedge, caveat, or show any alternate counts at all.

Updated chart below:

In conclusion, equities have made a small impulsive turn out of the current massive intermediate inflection zone.  The preferred count of the past several months continues to remain as such as long as the all-time-highs hold.  As I wrote last update: SPX finally rallied into the zone it was "supposed" to -- now it's up to bears to get to work, or head back into hibernation.  Bears are off to a promising start; now they need to see this decline develop into a still-larger impulse wave.  Trade safe.

SPX Update

SPX actually did something in recent sessions, as it made a new high and, additionally, finally broke 2116, while flirting with the upper boundary of the larger chop zone in the process.  At this point, it's put up or shut up for the bears, as they (ideally) don't want to see a sustained breakout over the all-time-high, which isn't far away.

INDU and NYA did not make new highs, so one potential pattern is shown below, but please do not take this as a "high-probability projection."  We have nothing in the way of a decent impulsive decline yet, so I can't guarantee that red wave c is complete.

Bigger picture, things are unchanged:

In conclusion, SPX finally rallied into the zone it was "supposed" to -- now it's up to bears to get to work, or head back into hibernation.  Trade safe.

SPX and BKX: Still a Chop Zone

Friday saw the market open sharply lower, but buyers showed up for the remainder of the session.  Near-term, the pattern is nothing but chop at this point, so I can't draw any high-probability near-term conclusions at the moment.  Bigger picture, we're also still in the chop zone that I warned about back in March.  Stay alert to the possibility of a head-fake higher.  In the event there's a breakout followed by a whipsaw with this pattern, I would suggest bulls behave extremely cautiously.

BKX did what it was "supposed to," but it didn't do it in a pattern that leaves much clarity in its aftermath, so there are no new conclusions to be drawn here presently:

In conclusion, we're still inside a larger chop zone, and there still isn't any new information from the market.  Thus, as of yet there really isn't too much to add beyond the last few updates.  That will hopefully change soon, but patience is in order for the moment.  Trade safe.

SPX and RUT Updates

Yesterday was one of those "special occasions" for my family, and there's nothing to add to the big picture, so today's update is going to be short -- but hopefully helpful.

We'll start with RUT, which hints at the potential for increased frustration over the coming sessions:

Below is SPX in its simplest possible form.  The chart should read "...then 2076 +/- is the FIRST target."

In conclusion, beyond the charts shown above, there's still not much to add to the recent updates.  Trade safe.

SPX and BKX: The Canary Hasn't Died Yet

Last update, we discussed using BKX as a canary and trade signal, and concluded with:  "Of course, if BKX fails to make a new low here, then we'd have no impulsive declines to signify a turn was underway yet." 

Unfortunately for bears, BKX did not make a new low during Friday's session, so there is as yet no confirmation of a turn, and thus no clear signal to act against.  That could, of course, change during today's session, but as of this moment, the market has reserved the right to run higher if it so desires:

On SPX, bears are running out of real estate for the C-wave.  On the plus side, we're finally into territory that qualifies as "lower risk."  Lower risk does not guarantee the market will move in your favor -- it just means that if it moves against you, you lose less than you would have if you jumped the gun and entered too early.

In conclusion, there's still no material change.  If the C-wave is going to pan out, then bears need to make a stand fairly directly.  As of yet, though, the declines have remained corrective, with nothing impulsive for bears to take action against.  Trade safe.