SPX and INDU: Hints, Allegations, and Things Left Unsaid

Last update I noted that "the good news is out now," due to the old expression "buy the rumor, sell the news."  Sell the news is exactly what the market did on Friday.  And while we do not yet have an impulsive decline, the shape of that wave does lend itself to being a bit more encouraging for bears than anything else we've seen yet in July.

On INDU's chart, you can clearly see that the decline so far is only three waves.  In fact, it looks like it may not even be three complete waves down yet, so my first inclination is that the bottom is not yet in, even if this is just to be a minor correction -- and of course, certainly not if it's the start of a larger turn.  Point being, either way, my first instinct is that there are still lower prices due:

In conclusion, we do not yet have an impulsive decline for confirmation, but things look more promising for bears than they have all month.  How long that lasts remains to be seen, of course.  Trade safe.

SPX and INDU Updates

So, the good news is out (more on this next update), and the market rallied.  INDU has finally fulfilled the "more common" pattern expectations, which I first laid out back on June 11:

SPX has (nearly) tagged the upper rail of its current channel:

We've yet to see an impulsive decline, but on the flip side, bears don't have a ton of real estate left, so if they're going to get anything going, they probably have to do so reasonably soon... or give up the market to bulls.  The next few sessions should be important.  Trade safe.

SPX Update: Longest. Wait. Ever.

So yesterday, the SPX finally captured the long-standing 2828 +/- target, which I originally discussed in our forums back in February of this year.  Not sure when I first published it publicly, but that likely would have been February/March as well.  Seems like it's taken roughly forever, and it certainly hasn't been a very nice market environment for either bulls or bears over the past few months.

In any case, yesterday, SPX tagged 2829, making the target capture official.  It remains to be seen if that's the "end" of the rally, or if there's additional upside still to come.  We do not yet have an impulsive decline to act against, so more upside remains an option, at least as of this writing.

And of course, the bull option for this to be a third wave has never gone away, but I'm still holding that as the alternate count until the market says otherwise.

BKX has continued to hold its low, and has now rallied up to tag second blue resistance:

In conclusion, although this market has taken a reeeealy long time to get here, all of this has been on the table (and actually reasonably expected, since extended fifths typically form complex "double" retraces) for many months, so there's nothing here to be shocked about.  Yet, anyway.  The market can certainly run a bit higher if it wants, and I've seen many extended fifth retraces nearly-perfectly tag the prior high before reversing.  In this case, that would be the all-time high, if the market chooses to go that route. 

For this reason, it continues to remain advisable for bears to await an impulsive decline (I know I sound like a broken record with this for the past few months, but as anyone who shorted too early knows, there's good reason for this approach) before acting too strongly.  Trade safe.

SPX Update

Still nothing exciting to add.  INDU's recent decline appears impulsive (small impulse), but SPX is only three waves down so far. Even if the market forms another wave down immediately, it's too early to say if that will simply be wave C of a small fourth wave correction, or if it will be the start of a larger correction.

Other than that, nothing new to add since the last few updates.  Trade safe.

SPX and BKX Updates

Last update expected that the market would likely head at least a bit higher into its inflection zone, and that's what it's done since then.  There's no real change -- this appears to be an important inflection zone, but there's a little bit of wiggle room left to the upside, so the market does not have to reverse immediately (or at all -- technically the market is free to do whatever it wants; inflection zones don't ALWAYS generate reversals).

SPX rallied right up to the red (v), and I had to move it slightly to show the price call-out:

BKX again held the support zone we've been watching, and rallied up to first resistance, where it bonked its head.

In conclusion, there's no real change from last update.  Trade safe.

SPX and INDU Updates: Market Approaching Upside Inflection Zone

Since last update, the market has crept higher, which was not unexpected.  We're now finally getting into a larger upside inflection zone, for the first time since June 15, which generated a reversal, so let's look at some charts:

INDU would look better if it ran a bit higher, but it isn't required, so here again, bulls should probably stay on their toes:

Big picture, it's been more than 6 months since I updated this chart, because the important support zone has continued to hold since then (so there was nothing new to add):

In conclusion, the market is in the process of reaching an upside inflection zone, so it will be interesting to see how it reacts to that in the upcoming sessions.  Trade safe.

SPX and BKX: Technical Jargon

Still nothing exciting to add, as the market has steadfastly remained in a condition that's most often referred to by its technical term: "a bunch of malarkey." 

"This market's a bunch of malarkey!"  We technicians can often be heard muttering to ourselves at such times.  More often than not, the next words out of our mouths involve elaborate plans to self-educate on spear fishing, but we never seem to get around to it.

On the bright side, I was able to get the SPX chart to load today.  On the "meh" side, there's still nothing to add and updating it was just a matter of moving the last annotation back onto the chart (it has slid off as the chart auto-updated itself).  We may or may not need another micro fourth wave correction and fifth wave higher; still depends on whether that last move was a triangle or not.  It is at least possible that there are roughly enough waves for the rally to be complete, though.

Still keeping an eye on BKX, as a sustained breakdown here would tend to look fairly bearish:

In conclusion, we're still watching for an impulsive decline before getting too aggressive in acting against this (now-multi-month) upwards-biased extended sideways grind.  Trade safe.