Updates for the (soon to be renamed) Trump 500 ($SPX) and The Trump Industrial Average ($TRUMP)

For a long time now, I've had my intermediate charts marked with the projection for a large C-wave decline, and I've been wondering from whence the catalyst for such a decline might come.  Tonight, it appears Donald "The Donald Trump" Trump has been declared the next President of the United States of 'merica, and that may be as good a catalyst as any.

As Trump's victory grew more apparent, futures began tanking, largely because Trump has threatened to rename Wall Street as "TRUMP Wall Street," which made traders nervous.  Wall Street had also priced in a Clinton victory -- which was apparently worth at least 100 ES points, probably because Hillary had promised "a pantsuit in every closet," which led to a growing bubble in the overweighted pantsuit manufacturing industry, which now accounts for nearly 38% of the total market cap of the S&P 500.

Compounding Wall Street's fear is the fact that Trump has repeatedly vowed to abolish attractive hairstyles, which means that many hedge funds managers will either lose their jobs, or be forced to show up at work wearing "no less than three" dead ferrets on their heads.

(WARNING:  Rant Alert!)  First of all, let me preface this next comment by stating for the record that I, personally, did NOT vote in this election.  The candidate I liked (and also happen to know personally) had zero chance of winning, and while I applaud those people who feel it's their Red (or Blue) Blooded Patriotic American Duty to vote, I am not one of those people.

Now, that said, and my functional neutrality has been declared...

I, for one, am looking forward to the elite news media helping to "unify the country" and
"put all the bickering behind us" by doing things such as declaring Trump's victory to be the equivalent of half of America voting in favor of live televised executions of minority group members, and how the only people who voted for Trump are illiterate gun-toting morons who live in bomb-shelters and drink applesauce through straws.  Hmm... why do I feel like I've seen this movie before?  One commentator I heard tonight even went so far as to suggest that Trump was carried to victory on the backs of racial bigots, as a backlash against Obama being black.  That's the stupidest thing I've ever heard.  How can one even present that reasoning after Obama already won (and served) a SECOND term?  

Again, I assure you I had no horse in this race.  I mention all this because I've now heard variations on this basic theme twice already tonight, from two different networks -- and it bothers me on a fundamental level.  No matter who you supported, it should bother you, too.  For crying out loud, somebody needs to say SOMETHING about it.  Personally, I don't understand how the elite media can preach tolerance on one hand, while at the same time belittling and disparaging anyone who's "different from them" on the other hand.  You can't have it both ways.  You can't demand tolerance for "people who agree with you," while behaving as if you're terrified of everyone who doesn't -- in fact, fear is the very emotion that lies at the heart of virtually all intolerance.  The whole point of being tolerant is to learn to respect people who are different from you, whether you understand them or not.  Not to act fearful of them, not to try and frame them as "damaged," and not to try and ascribe nefarious motivations to them -- simply because you don't understand their motivations in the first place.  Just accept that you don't understand and leave it at that.  It doesn't make them "inferior."  Who knows, maybe it makes you inferior for not being able to grasp it all.

Anyway, now that I've assured that I'm going to get angry letters from someone out there, let's get to the charts!

There's no real change to anything -- SPX briefly cleared the level I'd noted as important resistance (2140), then fell back below it, and closed right on it, at 2139.

 INDU:

In conclusion, the simple version of everything is that bulls need the all-time-highs to cast doubt on the intermediate counts, while bears need the recent lows.  Trade safe.

SPX and RUT: Patience Isn't Just a Virtue, It's a Necessity

What's the one aspect of a trade that we can't control, no matter how hard we try?  Well, in order to answer that, let's start with what we CAN control.  We can control our entries.  We can (barring gaps), control our exits.  So we can control our risk for the most part -- and, with that, come all the aspects of discipline to achieve that control, of course: i.e. - Controlling our emotions, controlling our reactions, etc..

But the one aspect that we cannot control, no matter how many positives we have going for us, is time.  In other words, we can't control whether a winning trade opportunity will present itself tomorrow, three days from now, or three weeks from now.  And that, in my experience, is the area most likely to get us into trouble.  Because we don't like waiting for things.  We all have aspects of the spoiled kid from Charlie and the Chocolate Factory present in our personalities, and we all "want an Oompa Loompa NOW, daddy!"  Not next week; not next month; and definitely not next year!

The catch 22 is that if we can't learn to wait patiently for good opportunities, then we'll never reach our goals at all.  Because our impatience will constantly cause us to take one step back (or worse) for every step we take forward, and our accounts will go nowhere (again: or worse).  Our impatience to succeed becomes the very stumbling block that keeps us from succeeding.

So the aspect that we most wish to control -- time -- is the very same aspect that we can never control.  And we all know it, whether we admit it or not.  We know that we can't "make" opportunities in trading, we can only find them and try to position in the right place at the right time.  To the degree that we accept that knowledge -- or the degree to which we rail against it -- is the degree at which we master patience.  And the degree to which we master patience is, at least in part, the same degree to which we master profitable trading.

The problem is the psychological pressure we all feel to get our Oompa Loompas NOW.  That's part of the pressure that can keep traders from cutting and running when a trade goes against them -- if they cut and run, then they absolutely can't "win NOW."  They have to go back to waiting.  So "being in the action" is perceived as the better choice.  If we're to be consistently successful, though, then we simply must learn to overcome that pressure and the temptation to try and "force the market to let us win" -- there is no other option.  Understanding that acting on that pressure actually delays our goals even longer can help.  Something my dad used to say, which he attributed to Tony Robbins, may also be useful to keep in mind:

"Most people overestimate what they can accomplish in a year, but underestimate what they can accomplish in a decade." 

Just some random food for thought.

Let's move on to the charts, starting with RUT:

SPX:

In conclusion, futures indicate a gap up in SPX, which will trap bears, and can be dangerous because those trapped shorts can potentially become rally fuel.  Thus, if various markets can sustain trade north of resistance levels, bears might have to play it cautiously and await more clarity.  If today's rally doesn't stick, or if the market is strongly rejected at resistance, then we may be dealing with a more simple backtest.  Trade safe.

SPX and RUT: RUT Captures First Downside Target

Since last update, RUT captured its first downside target, good for 30 points of profit.  Accordingly, I've added some additional info to this chart:

In the last two updates, I mentioned that unless there was a bullish whipsaw of the breakdown at 2114, then bears should probably treat this decline as the bear nest of 1's and 2's unless/until proven otherwise.  Nothing has changed in that regard.  Patterns like this are never guaranteed, but if we don't play them for their "most apparent" potential, then we will miss a lot of moves. 

SPX is now flirting with a breakdown at the red trend channel.  It closed marginally below that channel, but important breakdowns are often followed by choppy whipsaw action, to shake and punish newcomers who sold the breakdown -- so we may or may not see that type of reaction here.  I can't really predict that, given what's visible in the charts presently, but it's always a possibility to be aware of at times such as this.

In conclusion, presuming this breakdown sticks and doesn't whipsaw directly, then the most probable targets for SPX appear to be sub-1940, in line with the intermediate count I've been publishing for the past few weeks.  Trade safe.

SPX, NYA, INDU Updates: Finally

For what seems like the past 2,700 years, I've been repeating that I felt 2114 was not a meaningful low, and that the only question in my mind was whether it would break directly or after another sucker rally.  Yesterday finally answered that question, and also proved that 2114 was, indeed, not a meaningful low.

Due to the nature of the pattern leading into the decline, we probably have to "assume" the most bearish iteration of the wave counts -- but do be aware that the blue 2/b count on the chart below is not technically dead yet, so if the market wants to throw a final bird at everyone, it can still follow that path:

NYA is unchanged, so I left the annotation from Halloween, which echoes the call to watch for the warning signals above.  That said, if bulls can't stick save this directly, we are likely on the cusp of a significant decline:

Finally, I haven't updated this INDU chart since July, so it's interesting to see how things have panned out since the last update here:

In conclusion, the market finally validated my thesis that 2114 would break, now it's up to the bears to run with it.  The potential energy is present in this pattern for a significant decline, so we have to play it that way until proven otherwise -- but it's not impossible that the market has one last trick up its sleeve (in the form of the 2/b rally) so bears shouldn't get complacent and arrogant just yet.  Trade safe.

SPX, NYA, RUT Updates: Global Title Shortage Begins Impacting Updates

Prior to today, I'd had a decent collection of reserve titles stored in a fire-safe in my basement -- but today I realized that I don't HAVE a basement, leaving this update without a suitable title.

On Friday, SPX captured the "higher probability" target from October 26, and has so far managed to hold 2114.  I'm going to let the charts take it from here, starting with RUT, which hasn't been playing along with the Chop Zone that SPX has been stuck in:

Next is NYA:

The bigger picture view for SPX is still unchanged: (continued, next page)

SPX Update: Choppin' Broccoli for Halloween

"There is a fifth dimension, beyond that which is known to man.  It is a dimension as vast as Ben Bernanke's money supply, and as timeless as Hillary Clinton's pantsuits.  It is the middle ground between July and November, between hopelessness and frustration, and it lies between the pit of roughly 2114 SPX and the summit of 2193.  This is the dimension of lost time premium, of random stop grabs, and of traders screaming at computers.  It is an area which we call:  The Chop Zone."

(insert "dee dee dee dee, dee dee dee dee..." music here)

That intro is, of course, stolen verbatim directly from Rod Serling's prophetic TV series:  The Chop Zone.  In order to appeal to a larger audience, that show was later reworked into the more widely-recognized Twilight Zone, which made its debut 57 years ago (in 1959), during the month of (you ready?) October ("dee dee dee dee...").  It's too bad that the original version was never made public, because the intro alone could have saved today's traders a LOT of grief.

From a "traders almanac" standpoint, today should be significant, since this weekend is Halloween, at least for those traders who are missing a day on their calendars (me; some guy named "Sal" (Manilla?) in Brooklyn) -- and we all know what Halloween means to the market!  Wait, I've just been handed a note by our research department... you mean we DON'T know what Halloween means to the market???  You say it has no real market significance AND it's not a major holiday?  Oh sheesh.  Try telling my wife!

Despite the Negative Nellie attitude of my research department, a quick Google search using the terms "market patterns on Halloween" revealed the following disturbing Halloween patterns, so we should keep an eye out in case these show up in the next couple trading sessions:

On a more serious note, we're still in the chop zone (been trying my best to at least keep these updates interesting!), and the market has managed to eliminate exactly zero of the short-term options, although the diagonal is looking less probable:

For the larger view, nothing has changed yet (obviously!):

It's interesting to note that BKX has not been playing along with SPX's chop zone tendencies, and has now slightly exceeded my July target zone:

In conclusion, there's really nothing to add down here that I haven't already said two or three hundred times already -- so I'll simply end with my usual sign off:  Trade safe.
 

SPX Update: The Market Hates You

First off, for last update, I feel obligated to apologize to readers for not remembering to remind everyone yet again about "the red trend line," which I had discussed as critical in numerous prior updates.  Monday's rally briefly broke above 2150, but was then rejected at that very same red trend line (see below).  On Tuesday, SPX was unable to claim Monday's opening high, and continued to chop lower throughout the session.  Unfortunately, this leaves the near-term incredibly ambiguous.  The intermediate preferred outlook remains unchanged.

I've attempted to outline some of the near-term potentials on the chart below -- although just about anything goes in a chop zone like this, so the near-term pattern may be even more complex than those shown below, and thus may simply not be apparent yet.  These are certainly not the only options.

In conclusion, SPX continues to grind traders into submission.  Chop zones sometimes appear to serve the function of capitulating trend traders prior to a larger trending wave finally getting underway -- and to convince trend traders to bail too early once it finally DOES get underway (because everyone has been conditioned to expect more chop).  The choppy overlapping nature of the recent waves also means the near-term pattern thus remains up for grabs.  Intermediate term, I still favor lower prices.  Trade safe.