SPX and BKX Updates

Last update I mentioned how it was unlikely the bottom was in yet, and that I expected at least a couple micro fourth and fifth unwinds before a bottom would become possible.  We got the pattern I was anticipating, and now there are enough waves in place for a complete decline.  I cannot unequivocally state that the decline is complete, only that at least now the potential exists for it to be complete.

Bigger picture, it's interesting how perfectly SPX tested the confluence I'd drawn on this chart:

BKX has reached its first downside target zone.  On the chart, the prospect that the final low is in for BKX looks a bit shaky, and a new low or two in BKX would not surprise me at all.

In conclusion, there are now enough waves for a complete correction in SPX.  A minor new low is okay, but any sustained breakdown would need to be approached extremely carefully by bulls, as it would open the possibility of a notably deeper correction.  Trade safe.

SPX and RUT: Downside Target 1 Captured

It's been an excellent month for the preferred count.  At the beginning of the month, SPX captured November's standing 2400 target to the point (good for about 200 points of profit), then reversed.  Since that target capture, the preferred count has continued pointing toward lower prices, and the chart published a week ago was an exact dead-on hit:  The market rallied, the rally turned where projected, and the decline has now captured the first downside target zone.  That projection alone represented another nearly 70 points round trip -- so now here we are wondering if the market will find support soon.

As of this moment, it's foolhardy to call a bottom, because most markets closed on or near the lows of yesterday's session.  That doesn't mean we can't bottom directly, it just means that it's ill-advised to call a bottom when the market goes out on the day's low -- just as it would be ill-advised to go to Vegas and bet your entire life savings on one spin of the roulette wheel (with the understanding, of course, that "ill-advised" doesn't mean you couldn't win anyway!).

Thus, as of right now, we have to see something more from the market to know if it's going to bottom here or not, and today's charts will have to reflect that current reality.  Most of the time, I'd say that this pattern at least LOOKS like it needs to unwind some micro-fourth and fifth waves before it could bottom -- so I'd typically expect to see at least another marginal new low or two, (which, if we see the decline slow, would also serve the function of absorbing some of the inertia from yesterday's sharp drop -- and absorbing that inertia is the first step before it can be reversed).

RUT's pattern has taken on a potentially dangerous look, and bulls will need to put the brakes on this as soon as they can if they wish to stop this pattern from acting as a head-and-shoulders.  Bulls would like to see a sustained whipsaw of the neckline, followed by a breakout over the falling blue trend line.

In conclusion, the market has captured the upper edges of the first downside targets, but there's no clear sign of a bottom yet, so at least marginally lower prices are still likely.  With the chart's current appearance, we also cannot yet rule out the possibility that a deeper correction is in progress.  So, just as in the prior update: lower prices still look likely -- the main question is how much lower, so we'll just have to watch how the market reacts to this first target zone.  Trade safe.

SPX and BKX: No Suprises... Yet

Still no change to the recent updates.  The market has tracked its projections well all month.  The current alternate is that ALL OF blue Bull 3 is complete, which (if it is) would then put us in Bull 4 down, with Bull 5 up still to come.

The near-term count outlined in the prior update has performed according to expectations so far.  Keep in mind the potential that ii/b and/or 2/b may still be unfolding.  Also bear in mind that the bearish overlap noted is not a "set in stone" overlap, because the overlap could be part of a subwave of 2/b, which would not violate any rules:

BKX has also held up its end of the bargain all month and honored the red iii label since March 3:

In conclusion, everything continues to track well, so the market's given us no reason to radically alter the recent outlooks.  Trade safe.

SPX Update: T1/T2 Captured; No Change

No change from the prior update.  SPX captured upside targets 1 and 2, and has, so far, followed the map that was outlined in the last update.  Obviously, all bearish near-term bets would be off with sustained trade above the all-time high.  Keep in mind that this correction is, presently anyway, ultimately expected to resolve higher either way.

Haven't moved anything on the IT chart since last update:

In conclusion, there is no change whatsoever from the prior update.  Again, near-term bearish bets have to be called into question with sustained trade above the all-time high.  Trade safe.

SPX Update: A Bit More from the Market

SPX has chopped sideways since last update, and the pattern now makes me inclined to believe that the odds of another leg down are better than 50%, so I have updated the charts accordingly.  This is still a pretty tight call, but we probably have to lean this direction unless and until SPX sustains a breakout over the all-time-high.

I have also adjusted the upside targets for the possible (smaller) second leg up, which apply if SPX clears the 50% Fib:

NOTE TYPO -- Obviously, upside targets are 23xx, not 22xx!

The intermediate chart shows my preferred path, give or take a few points:

In conclusion, this remains a tight call, but I'm going to go out on a limb and say that a larger second leg down appears to be the most probable resolution to this pattern.  I am a bit less confident of the smaller second leg up that might precede it -- but the larger second leg down does look to be of reasonable probability.  Trade safe.

SPX and BKX Updates

Let's get right into the charts today, starting with the SPX intermediate chart.  On the chart below, it's important to note the back-test of the red trend channel.  Bears need the market to fall back into that channel and sustain trade and closes to really get anything going.  Bears beware any trip below the channel that is relatively short-lived, though.

Near-term the rally was rejected by the 50% Fib retracement, but will have a shot today at claiming that level.  The next near-term targets are noted:

BKX has the appearance of a market that may continue correcting for a while, though since this is presumed to be a larger-degree 4th wave, it can grind traders up if it wants to:

In conclusion, my conviction on SPX's next move remains marginal, while BKX does look like it wants to continue correcting.  Near-term bearish bets on BKX are off if it sustains a breakout over the presumed wave iii high, of course.  Trade safe.

SPX Update: Downside Targets Captured

There is at least one material change from last update... in the last update, I didn't feel at all confident that the decline was over, and it turned out it wasn't.  Now at least I feel it has the chance to be over.  I'm still not certain if it will form a b-up and c-down, but it could at least be complete as the entire 4th wave if it wants to.  A bit more detail and some possible resistance zones on the chart below:

If this turns into a more complex fourth wave, then we'd be alert for a trip toward the lower red "4?" after a bounce completes.  Note the perfect back-test of the old red channel:

In conclusion, the decline has now cleanly captured the targets I drew on March 3, so if this is the entire fourth wave, then we've likely seen the bottom and will head toward blue Bull: 3 next.  The downside target capture is notable in the sense that the market has shown a lot of strength prior to this decline (and strong markets often FAIL to reach downside targets), so if the market starts to struggle with the upside resistance zones, then do at least stay alert to potential for a more complex fourth, and a trip toward the second red 4 on the intermediate chart.    Trade safe.