SPX and Long-term Oil Update

Still no change in equities, so we have to continue presuming the bull count unless and until the bear count shows signs of life and gives us a reason not to.  It would do that by forming an impulsive decline.

From a big-picture standpoint, Crude Earl has been pretty uneventful for a while now, which actually fits the idea of a fourth wave.  Back in June of 2016, I noted that a fourth wave at this degree could "unfold over the course of a year or so," so this continued sideways grind isn't terribly surprising.

I'm updating the Oil chart because it looks like we're in the throes of red "or (2)" (from June of this year).  Blue c (not shown on the chart) of red "or (2)" looks like it may be unfolding as an ending diagonal, so I figured it might be helpful to readers to get a rough idea of how that would look (if that is indeed what's unfolding, anyway).  Thus I sketched that into the chart.

Hard to believe, but this is currently my oldest continuously-running chart that's had no material changes since I first published it.  It celebrated its sixth-year anniversary this month (!).  Long-time readers already know it was September 9, 2011 when I first publicly predicted that oil had topped, and turned, and was headed to 25.  And yes, I will toot my own horn about that until the day I die.  Like you wouldn't!

In conclusion, there's still nothing to add regarding equities.  Oil may be in the process of completing red (2), but if that is indeed taking the form of a diagonal, then it might still take a few weeks.  And of course, be aware that in the event oil sustained a breakout over 56, then we would have to consider the possibility of "alt. bull: C."  Trade safe.

SPX and RUT: The Stuff of Nightmares

SPX made another new all-time-high on Friday, and has continued to keep its options open.  Again, as long as it continues holding support and there are no impulsive declines, the bull count has to be preferred -- so I've added details for the straightforward iteration of that count to the chart below (adding details to a standing bull count is sometimes the cue for the market to roll over -- just a head's up):

A few readers have requested an update to the Russell 2000 (RUT), so here's my best-guess on this one.  The thing with RUT is that there are complex patterns, there are very complex patterns, and then there are patterns that are the stuff of nightmares.  RUT's current chart is the type of thing that would be shown on an endless loop in a technical analyst torture chamber.

In conclusion, until we see an impulsive decline or see some support levels fail, there's just not much for bears to hang their hats on yet, so we have to presume the trend remains up for the time being.  Trade safe.

SPX Update: Keeping Things Short and Sour

Or is that "sweet and sour"? 

Short and sweet!  That's what it is, I think.

Nothing much happened since last update, and yet we're able to eliminate at least one potential pattern from the mix.  The reasoning for this is discussed on the chart below:

We're just going to limit it to that one chart today, because one is enough in a market like this.

Beyond the notes regarding the diagonal, there's pretty much nothing to add to last update, since SPX has traded in a tight range since then.  Hopefully more to add in the next update!  Until then, trade safe.

SPX Update: Pshaw

Well, SPX has proved that way back on August 21 (when I wrote about the potential that the wave was ending as a complete bullish ABC), I should have just favored the bull count.  And assumed that the bulls would win every battle heading forward, like they did in my grandpappy's day, and in his grandpappy's day before him, waaaaay back when Janet Yellen was only 65. 

Instead, I decided to buck the odds, and on August 23, I wrote:

In conclusion, bears haven't had much luck with bear nests in recent years, but this time just might be different.  Whether it is or not, at least there is a very clear confirmation level for bears to watch (and for bulls to defend), and probable targets to aim for if/when that level fails.

But nope.  This time wasn't different.  But at least we knew from day 1 exactly what the bears needed to do to get things in gear, and that much proved correct.

Now we're into territory where there's simply no high-probability pattern at this exact moment.  I've discussed this in detail on the hourly chart below:

The near-term chart from last update proved at least modestly helpful:

In conclusion, bulls are still doing their bull thing, at least for the time being.  And while there's a possibility the rally will complete soon, there's just nothing that's screaming "short!" here, so bears will have to be patient and allow for the possibility of missing the "exact" top.  In a perfect world, the rally won't end completely abruptly, though, and the pattern will hopefully provide more clarity and advanced warning as it develops.  Trade safe.

SPX and NDX: Take It with a Grain of Gunpowder...

Last update suggested that NDX looked like a complete ABC rally, and NDX has declined enough to validate that call.  However, that doesn't mean bears are completely in the clear, as we'll see on the chart below.  In fact, I still feel that bears should HOPE the near-term pattern here is bullish (in the form of the triangle shown below), so they can at least get a better shot at things down the road.

SPX continues to remain a bit cryptic.  I've drawn a "best-guess" near-term projection, but my confidence isn't high, so take it with a grain of gunpowder. (If you've run out of salt, you can season meat with gunpowder!  True factoid -- but this is not cooking advice.  Please consult your chef before making any seasoning decisions.)

In conclusion, nothing much has resolved since the most recent updates, but we do at least have a couple patterns and levels to keep an eye on.  Trade safe.

SPX, NDX. BKX: BKX on the Verge...

So we have two potentially interesting developments since last update. 

The first is BKX, which is finally getting close to validating the preferred count of the past 5 months (seems like FOREVER ago that I first suggested BKX rallies should be sold -- maybe longer than forever).  It has also all-but-validated the preferred near-term count from last update, and the steep relentless decline has certainly behaved in line with the predicted bear nest:

The second is NDX, which has reached a bear inflection point.  The rally since last update has, so far anyway, taken the form of three waves, which count as complete.  As long as NDX doesn't rally immediately north of 5981, then intrepid bears could treat that high as the labeled 2/B wave and short against it if they're so inclined.  If attempting such, do keep in mind that 6009 is the more critical zone, because we can't yet rule out all the potential near-term patterns that could briefly head-fake above 5981 without killing the bear case.

Finally, SPX is still the odd man out, and its pattern leaves much to interpretation.  Given the state of BKX and NDX, I'm somewhat inclined to think SPX will probably at least test the lower black trend line -- and possibly head quite a bit beyond that (the black B/2 and red Bear (A) will be the key inflection points, so if we do head lower, then bears may want to increase caution near those levels).

I really have no clear reason in SPX (by itself) to favor a near-term bearish outcome... but I'm somewhat inclined to do so anyway.

In conclusion, if bears want to try to get back in the game, NDX has reached an inflection point and the potential of a straightforward pattern.  BKX is finally close to validating a predication made five months ago, and even if it holds here, it's declined enough to mean good news for bears who've been attacking the financials on that standing recommendation. 

SPX is still a bit cryptic. The near-term pattern there can be counted as a complete ABC rally from 2446 to 2469, but leaves just enough room for doubt that I can't rule out the possibility for it to decline slightly, then rally again toward the upper black trend line, before reversing again and heading toward the lower trend line (if it ever does head to the lower trend line, of course).

Despite the tight calls, I'm still inclined to give the overall nod to bears at the moment, and suspect we'll break 2446 before we see the market above 2480 again ("before" as in "I'd sell my right leg before I'd smile at Bernanke!"  Not "before" as in "this, then this other thing immediately follows."  This verbiage has caused confusion before, so I'm hoping to head that off.).  Trade safe.

SPX, NDX, BKX: Market Throwing Some Mixed Signals

So they're keeping things interesting.

On the one hand, we have NDX, which made a new all-time-high during the last rally, but has (so far) not formed a complete-looking wave structure.  That suggests that either the recent drop was just a fourth wave in NDX, or the ATH is a b-wave. 

On the other hand, we have BKX, which rallied from its inflection point, but has since broken back below it.  And which looks increasingly like a bear nest. 

And in the middle we have SPX, which didn't quite rally high enough to meet the guidelines for a 3-3-5 flat (came very close) -- although that's not a complete death sentence for the flat (in this case we're dealing with a guideline, not a rule). 

SPX dropped sharply, but didn't break the prior low, so it hasn't locked-in a three wave rally just yet.  Accordingly, it still has a lot of options on the table, including the discussed flat, the option for a triangle (mentioned below), and other possibilities.  At this point, a sustained breakout/breakdown beyond the edges of the recent range implies some degree of follow-trough (subject to change if the pattern changes, of course.)

In conclusion, there's no overarching theme permeating the market right now.  Bears can hope that BKX is a bear nest, while bulls can hope that NDX fulfils its bullish fourth wave potential.  Whether either of those things happen, and whether either of those things will mean much to the broad market, remains to be seen.  Accordingly, this is a mixed signal market at the moment, with nothing pointing a clear way to a high-probability outcome.  That can always change in a single session, though, so we'll keep watching for additional clues.  Trade safe.