SPX, RUT, COMPQ, INDU: Intermediate Top in the Cards for the First Time in a LONG Time...

Everything seems to be aligning, so I suspect we're in (or have completed) the final leg of this rally before a very significant correction.  I've been consistently long-term bullish for a long time now, but it looks like I'm finally going to need to hang up my bull horns -- for at least a while -- in the not-too-distant future.

Let's start with COMPQ, which is providing long-term perspective on this whole thing.  I've noted in the past that "SPX would be expected to follow a similar path" -- please note that SPX is in a different wave count, but that's irrelevant.  It does not need to be in the exact same count to follow a similar path.  I would love to see COMPQ hit the final 7425 target, but it's not required and it's already reached the ballpark zone...

RUT's long tem chart suggests we're either "there" or nearly there:

RUT's near-term chart has tracked well... if it continues to (the original projection was for another leg down), then that would jive with the potential top on the LT chart (note this chart below is not intended to be a comprehensive long-term chart or projection, just a near-term discussion):

INDU provides some near-term perspective, for either a b-wave, or a fifth wave extension.  Is it also possible that INDU just topped?  Well, it's not impossible that blue iii is ALL OF red 5...  we'll have to take it as it comes here...

SPX has the "Bear: V" label in use for the first time in a long time.  Here again, it's not my ideal world, but it is technically possible that ALL OF 5 is now complete.  I would really rather see at least one more leg up, though... but if we get close to calling the high of this move, I'll be pretty happy, considering we've stayed bullish through 95% of the rally and are only now switching focus.  And considering that 99% of the investing public is still rabidly bullish.  Along those lines, tons of big-name analysts just raised their 2018 projections -- so we're very much bucking the trend to even be discussing tops.  On the flip side of that coin:  It's one thing for the "perma-bears" to discuss tops (that's what they do) but it's wholly another to consider that we've been bullish and have captured the lion's share of this rally -- more than 200 points since September-- so far.

Point being, we may or may not hit the exact top to the penny, but if we can beat the big-name analysts, in addition to the perma-bears (who we've already beaten), then I'll be pretty happy with those results.

In conclusion, we seem to finally be in the ballpark zone where this entire rally could complete, meaning an intermediate top may be near.  Ideally, I would like to see at least one more push higher, but it's no longer a requirement, as it has been in the past.  Trade safe.

SPX, COMPQ, RUT: Remember that "Blow-Off Top" We Discussed a While Back...?

Last update expected at least one more leg up was possible for the near-term -- but we weren't really looking for this blow-off here just yet... though we noted that bears' best hopes seemed to be for a b-wave expanded flat.  I was somewhat suspecting we might see a more complex iv over the near-term, but it now appears that may have completed as a rare running flat (see SPX chart "or C of iv" label).  The near-term hasn't been the easiest to track -- but at least the b-wave high was a clear signal that we were still pointed higher over the next larger time frames.  The large rally on Friday implies that the b-wave bears were hoping for (it's bad when bears' best hopes continually seem to be nothing better than b-waves) is probably off the table, and that we're unwinding another impulsive rally.

(I'm having random color scheme issues, hence the off-font/color above)

The good news for bears is that at least when this ends, there will be a chance that we've put in ALL OF 5... although that's probably not where our focus should be just yet, given how many times the fifth wave of each rally leg has extended.

Let's start with SPX, which is going to capture its next upside target zone (note typo:  "blue i/ii" should be "blue 1/2"):

COMPQ is still a bit shy of its ideal long-term target, so if this holds any water, the rally may still have some life left:

The one potential ??? in the equation, at least for the near-term (if not longer), is RUT.  RUT followed my blue preferred path to the letter so far... now we see if it will reverse into another leg down.  If nothing else, this may give bears a target to shoot at, at least as long as RUT doesn't sustain a breakout over the ATH:

In conclusion, a few months ago, I began talking about the possibility of an "extended fifth blow-off top," and it appears that's what we're now unwinding.  These can be very difficult to trade if you're a bear, but they're gobs of fun (for as long as they last, anyway!) if you're a bull.  The thing about extended fifths is that they do tend to retrace rapidly, so once this ends, it's going to catch a lot of bulls by surprise.  Bears and bulls will likely both get one good shot at an exit/short entry, since extended fifths virtually always perform a predictable "double retrace" -- but the vast majority of bulls are not going to see that exit as an exit, which is exactly what leads to the second, deeper leg down of the "double retrace." 

We're going to do our best to accurately identify that one good shot when it comes.  Trade safe.

SPX, NDX, RUT

Last update suggested that odds favored that at least one more wave up was still remaining, and we did indeed resolve higher.  The question now is whether we've completed a larger degree wave structure, and there are some hints that perhaps we have.

RUT may be acting as a canary here, inasmuch as it seems to be pointing lower for the time being:

SPX is still virtually "uncountable," but the complex iv would fit the current wave structure quite well:

From a technical perspective, it's not impossible to rule out the possibility that SPX has formed a subdividing bull nest, with the wave labeled as "or B" above actually being wave 1 of a new rally, but that seems unlikely, given how overbought many markets are.. 

Interesting to note that NDX did get another wave higher as expected, but did not break its prior ATH.  If this pattern is a B/2 rally, then it could likewise be complete or nearly so:

In conclusion, I'm still not terribly fond of the current wave structure, which might fit the idea that it's a B-wave for a more complex IV.  B-waves are often quite difficult to read and predict.  Trade safe.

SPX, INDU, NDX: Quick Glances at Multiple Time Frames

Yesterday, SPX and INDU both made new all-time highs, so I'm glad we didn't get bearish near the recent low.  This market still isn't doing anyone any favors as far as future predictability, but we'll look at a couple options today.

First off, near-term, it appears we probably have at least one more wave up still remaining:

From there, the market has the option to put in a simple, short fifth wave -- or the option for an extended fifth.  Almost every wave lately, across all wave degrees, has developed an extended fifth wave, so it's not a bad idea to be wary of one developing here.

The extended fifth would allow a possible "resolution" higher, if it occurs, and could prelude a much larger correction -- while the market's other option would be less direct..  The other primary option here is for an extended sideways chop zone to develop.  Such a chop zone would leave the high unresolved, suggesting an eventual resolution higher from said chop zone:

In conclusion:  Recently, markets have been somewhat fractured, with RUT still well-off its high, NDX a little below its high, and SPX and INDU at new highs.  This is not aiding in "predictability" here, but I'm expecting things will clarify in fairly short order.  Trade safe.

Market Stil a Pigsty

Wave counts at time frames beyond five minutes are still too muddy to bank on, so today's we're going to look at a long-term trend line chart, which may offer some clues heading forward.

The middle dashed black line (most recently tagged at the 2624 low) is interesting, inasmuch as it runs back about two years and has been a consistent support/resistance zone.  Most recently, of course, it acted as support.

Near-term, we have a couple potential basing patterns unfolding in INDU and NYA:

NYA:

I'm not certain how "good" those patterns will end up being, but it's not uncommon to see them form just before a market takes off. 

This type of yuck market is not surprising, considering that  the much-anticipated Fed Fun Day is coming up in the middle of the week -- wherein the Federal Reserve is expected to jack interest rates by just enough basis points to qualify as "greater than zero."  The market often goes into a holding pattern ahead of such announcements, just in case the Fed comes out and says, "We're raising rates to 57 percent!  Surprise, suckers!"  while laughing maniacally.  Or in case they say, "We're going to launch another QE program, and will be buying up any assets that aren't moving.  And we mean that literally -- as in any assets that consist of inanimate objects, such as The World's Largest Ball of Twine.  And William Shatner's kidney stone."

The market knows it needs to be ready for such surprises, because we've had, you know, SO MANY from this Fed (/sarcasm), and investors just don't want to commit ahead of time.

Anyway, in the meantime, the market has been enjoyable and predictable for so long now that you just knew they needed to throw in some weirdness at some point, in order to keep us from collectively raising enough trading capital to actually buy the Federal Reserve and rename it something demeaning.  Also, we would staff it entirely with pigs.  Then we would require the pigs wear suits, and we would force reporters to address the head pig as "Mr. ChairPig, sir. Or madam."  (Because we don't know how to tell pig genders, so we'd make them use both.) 

That seems somehow fitting (no offense to pigs).

Sorry, got off on a tangent there.  I think the point was:  This market is still a mess, so trade safe.

SPX and NDX: Fun

I've studied a lot of charts since yesterday's close, and I was hoping to have something clear-cut to publish here... but in the end, it's probably a 50/50 bull/bear proposition at the moment, and I simply have to reiterate the "Yuck" sentiment from last update.  Let's look at why.

We'll start with NDX, which we can see could either be a completed correction, or a b-wave low:

Likewise, SPX is sporting a rare wave that could be EITHER an impulse or a correction.  Normally there's something to clear out one option or the other, but not in this case.

Not shown is INDU -- but INDU is the one market that makes me tempted to lean (if I had to, which I'm not) toward the bears very slightly, because its recent low looks very much like a b-wave.

In the end, though, I have to figure this as a 50/50 proposition, because there's nothing that screams the answer.  Bears could take a crack at low-risk entries with tight stops if they're so inclined.  Trade safe.

SPX and NDX: Yuck

Last update noted the potential that we could reverse back down to break the prior low for a more complex wave iv, and SPX has been on a relentless, though subdued, decline ever since.  Thus the more complex iv is obviously still on the table.  Complicating matters, though, is that because the last rally did make a new all-time high, it is entirely possible that ALL OF 5 is complete, meaning the whole rally would be over, and we wouldn't see new highs for a while.

It's still rather unclear what SPX's intentions are at the moment, which is a change from the past few months when things have been crystal-clear.  I've drawn up an NDX chart that may help act as a canary (next chart):

NDX does have a couple more options beyond what I've shown, but this is probably the best we can do at the moment to help add clarity:

In conclusion, the double-retrace option (second red "iv?" on SPX) looks pretty viable at the moment, and we'll just have to play it by ear into the next couple sessions.  Trade safe.