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Monday, April 10, 2017

SPX Update: As the Businessman Said to the Beggar...


Friday's session was more fun than TWO buckets of monkeys, which thus leaves me with pretty much nothing to write about here -- since for all practical purposes, nothing happened on Friday.

So, no material change to the near-term outlook:


And of course, no material change to the bigger picture:


In conclusion, as the businessman said to the beggar:  "No change."  Trade safe.

Friday, April 7, 2017

SPX Update: More Fun than a Bucket of Monkeys


Since last update, SPX briefly cleared 2371, but then failed that level in the same session.  The most "straightforward" wave count is that Wednesday's move represented a B-wave rally within a larger expanded flat second wave, with the corresponding C-wave decline either complete or nearly so.  The bear option is that the "or C?" label on the 1-minute chart was in the right place and is the right count.

It remains a bit difficult to hold too much conviction, due to the ambiguity of the 2322 low.  But I'm still very slightly inclined to lean toward the more bullish interpretation.  But it is just a "lean" toward -- so an appearance by the bear option wouldn't surprise me, so a sustained breakdown at 2322 would have to be respected.



Still no change to the bigger picture chart:


In conclusion, this is one of the tougher calls we've seen in a few months, so I'm leaning toward the bull option, but not married to it.  Trade safe.

Wednesday, April 5, 2017

SPX Update


Bears' little respite looks like it could be short-lived.  The decline appears to be an ABC, and this would be confirmed with a breakout over 2371.

I'm having trouble getting charts to load today, so we're just going to look at the bigger picture chart (since that was all I could get!).  A sustained breakout over 2371 will suggest a third (or C) wave rally at smaller degree, and suggest a trip to at least the 2390 zone, and quite possibly to new highs.



In conclusion, I would have a hard time justifying shorts on any sustained breakout over 2371, at least for the immediate future.  The next place one could look (if you're bearish) would be 2390ish.  Of course, if 2371 holds, then we still have the option of a complete C-wave on the table -- but at this exact moment, it doesn't look terribly promising.  Trade safe.

Monday, April 3, 2017

SPX Update: No Material Change


Last update discussed the bull and bear cases in detail, and Friday did nothing to shed additional light on anything, amounting to basically a sideways grind.  Worthy of at least passing mention, the Nasduck 100 (NDX) has already made new highs.

In any case, the bigger picture charts are unchanged from Friday, and essentially unchanged from Februrary 2013.  I am still presuming that we are in a larger fifth wave, which should mean this bull market is finally nearing its end, in relative terms.  Within that framework, in all likelihood, we still have a smaller degree fifth wave higher left to unravel ("smaller degree" in this case -- relative to the entire bull market since 2009 -- is still pretty decent-sized).

Near-term, SPX bounced from the noted red trend line.  It might test that line again today.  If it fails, then it could take aim at the blue trend line.



In conclusion, we're still in the same place we were on Friday, so there's no material change to the recent updates.  Trade safe.

Friday, March 31, 2017

SPX and BKX: Bull Count vs. Bear Count


Last update discussed the possibility that wave 4 was completed, but also discussed the potential problem regarding the appearance of a corrective low (b-wave low).  Today I've annotated a few additional charts to give traders some signals to note and signs to watch for -- and I'm going to let the charts take it from here.

Let's start with the SPX 1-minute chart, which contains discussion about several details:



Bigger picture, nothing to add:


BKX kept us looking lower right up through Monday, but there's no crystal clear outlook here just yet (one could, of course, simply subscribe to the bull interpretation of a completed correction, as long as one manages entries and risk properly -- nothing wrong with that and NOT TRADING ADVICE).  The chart which follow this one will show what bears need to do if they want to keep fighting here:

(continued, next page)


Wednesday, March 29, 2017

SPX Update: Micro Patterns vs. Recent Market Behavior


For the past couple months, the market has been pretty clear, and SPX has captured all my targets both to the upside and to the downside.  As of right now, though, the crystal ball has gotten at least a little bit murky.  Let me explain why:

First off, it's entirely possible that the decline is a perfect ABC, to wrap up the anticipated red 4.  The thing holding me back from calling the bottom with more conviction is the b-wave "look" of the 2322 low in SPX (and other markets).  On the flip side of the coin, the thing holding me back from saying "That's a b-wave, so there's more downside coming!" is that earlier in the year, there were a few similar-looking "false b-wave" patterns that ended up being fully-complete corrections -- and the market never looked back.

So I just can't say with certainty whether the correction is done or not.  If it hadn't been for the "false b-waves" earlier this year, I would say it wasn't -- but since the market has been behaving differently in the recent past, that has to be respected.  If we ignore the b-wave look, then we have a perfect 5-3-5 ABC correction down, which would suggest a completed decline. 



In conclusion, I find this to be a bit of a quandary, so you'll just have to decide for yourself which way to play it.  On the one hand, I'd like to lean bullish based on recent market behavior and on the fact that if we ignore the "apparent b-wave," the pattern makes a nice ABC 4th wave -- but this is challenging for me, because leaning even slightly bullish goes against my philosophy of living by the sword/dying by the sword regarding the micro patterns (since the micro pattern in this case wants me to be bearish).  In any case, obviously, any sustained break of Monday's low calls for significant caution from those of the bullish persuasion.  Likewise, if we see impulsive declines forming, then we might heed those as an early warning.  For the record, IF the recent rally was/is a c-wave, then it will end abruptly, and it already has enough waves up to be complete (though one more new high would be acceptable and might look better).

This is just how it sometimes goes, especially after a long run of clear reads and captured targets -- eventually the market has to throw a curveball into the mix to keep things from being too easy.  Hopefully, this situation will clarify further in the next few sessions.   Trade safe.

Monday, March 27, 2017

SPX, RUT, BKX: Bears Still in Control


Last update noted that there were enough waves in place for red 4 to be complete in SPX, but that BKX was still suggesting further downside, and I wrote:

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.

Apparently the BKX chart was leading the way, and during Friday's session, it became apparent that SPX was going to follow.  Not only did SPX make a new low, but it made a low in such a way that the only hope bulls had was for an expanded flat, which would still point to lower prices.  I mentioned this in our private forums on Friday night/Saturday morning:


Bigger picture, if this is NOT simply the fifth wave lower of wave c (which we will not be able to determine immediately), then prospects for an even deeper correction will manifest.  We're going to have to watch this in real-time to determine if this is the case, for an additional reason:  Keep in mind that the label on the charts has been "3/c," because if we see a larger 4/5, then we'll have an impulsive decline, and we'll be dealing with a rally followed by yet another significant leg down.  And that could even eclipse the current low end of the price targets (high 2200's).  Again, we'll simply have to determine this as it unfolds.


BKX was pointing the way:



And RUT looks poised to come close to, or capture, downside Target 3:


In conclusion, this pattern has become a bit more near-term bearish now, and the market announced that during Friday's session.  We're simply going to have to see how the pattern shapes up from here, in order to determine if an even-larger intermediate correction is underway.  Trade safe.