SPX Update: Weekend Reassesment

Last update suggested that trade above 2676 would lead to 2705-10, and yesterday saw SPX reach 2708.95, smack in the middle of that target.

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Beyond the chart above and the recent target capture, I have little to add at this exact moment, and will reassess over the weekend.  Trade safe.

SPX Update: "Ambiguous" is a Four Letter Word

SPX has continued to trade within the confines of its latest near-term trading range, frustrating anyone who's been hoping for even a short-term trend.

We were somewhat spoiled by the volatility from October until early January, and the last couple weeks have been decidedly less interesting -- and certainly more ambiguous.

As such, there really isn't much to add.  I've presented a couple "if/then" equation targets on the chart below, but given this market's propensity for b-waves (patterns that reverse before completing their usual expectations, only to whipsaw and reverse again to then FINALLY complete their usual expectations), I would even be cautious with those.

In conclusion, there's no real change and not much to add.  Hopefully the market will get interesting again before too long.  Trade safe.

SPX Update: No Material Change

Short and sweet today, since there's no change from the past couple updates, which suspected that SPX would probably need at least one more wave down to complete a potential micro fourth waves:

In conclusion, in order to negate the bear potential, bulls would still need to clear 2676.  Barring that, it appears bears have a better shot at claiming 2616 in the interim.  Trade safe.

SPX Update

Last update, we talked about the expectation of one more wave down for SPX, and that happened immediately -- but the wave was a bit shorter than one would normally see.  This means one of two things:

1.  Either there is still another wave lower needed
2.  Or Wednesday's low marked the end of what's called a "truncated c-wave" (a c-wave that fails to travel the usual distance)

Today will thus be a test for both bulls and bears.  Bulls will still need to sustain a breakout above 2676 to get out of the near-term woods (we all know there are bears in .the woods!).

Last update suggested that because the red trend line hadn't been tested yet, it would possibly be tested at a level below 2676.  It appears that will happen today:

In conclusion, there's still resistance overhead, so it's entirely possible that today will bounce and stall at resistance.  If bulls can instead sustain a breakout, then the uptrend will remain intact.  Trade safe.

SPX Update: First Glimmer of Near-Term Hope for Bears Since December

Yesterday saw SPX decline significantly intraday, then, during the last 20 minutes of the session, it bounced as if there would never be another stock issued ("Buy your stocks now, boy -- they ain't makin' any more, don't cha know!").

For the past few weeks, I've admonished bears to await an impulsive decline before getting too worried about being short, and we now have what MAY be an impulsive decline.  I say "may" because the decline looks impulsive on the cash chart, but looks corrective on the e-mini futures chart.  For that reason, I can't say with certainty that the decline was definitely impulsive, and for that reason, I would advise bears to await a low-risk entry before attempting to act against it.

But even so, bears have at least avoided randomly shorting this rally the whole way up, and even if this seemingly-impulsive decline ends up blowing up, bears who maintained discipline are way ahead of people who have already shorted and been stopped a dozen times.

A big part of successful trading is learning how to pick your battles.

So, for the point of analysis, we're going to assume yesterday's decline was a completed impulse (wave A or 1 down), and that the bounce off 2617 is the start of wave B or 2 up.  We will thus expect wave C or 3 down to follow.  In the case of a C-wave down, that should be at least equal in length to wave A, which was 58 points.

Do keep in mind that if this downward correction is ONLY going to be an ABC, then it will make new highs above 2676 after wave C down completes.  We'll worry about that if/when we get there.

Bigger picture, we can see a whipsaw at the neckline of the prior topping pattern.  IF bears can't get back above that line quickly, this can sometimes be a near-term bearish signal.

NOTE TYPO:  2517 should be "2617"

In conclusion, this is the first glimmer of hope bears have had for even a near-term correction since December.  Bulls would need to sustain a breakout over 2676 to negate that.  Trade safe.

SPX Update: Zooming Out a Bit...

Last update warned that the near-term trend remained up, and yesterday, bulls launched a rocket over near-term resistance, finally clearing the rising chop zone the market's been stuck in for the past couple weeks.

Accordingly, it's best to pull back and look at the next potential resistance zones, in terms of the bigger picture:

There's really not much to add to the past few updates.  As I've been warning, bears should refrain from getting excited unless/until we see an impulsive decline, which would indicate at least a larger correction to the rally.  Especially since, as I outlined on Jan. 9, there's really nothing to prevent this wave from ultimately reaching new all-time highs.

I think all readers know that I've always labeled the current all-time high as a B-wave -- and most know that means I have always believed it's a corrective high (corrective highs are always retested or bested), not the final end of the bull market.  One way or another, we do ultimately foresee the market moving higher.  Whether the market wants to do that now or later is still the lingering question -- but so far, it's given little indication of weakness since the end of December, and until it does, we have to respect the present trend.  Trade safe.

SPX Update

Last update noted:

Futures... are suggesting a down open for the market.  But I wouldn't be terribly surprised if that goes nowhere (except back up toward the top of the recent range)

And that's what happened.  The market gapped down, but that decline stalled immediately, and went nowhere, except back up.  Bulls are now trying to break from the most recent chop zone, but have yet to make a clean break.  Their attempt yesterday found resistance at the red trend line.

This remains a very difficult fractal to predict, because I'm still not certain what the market is trying to accomplish here, and the last couple weeks have been anything but enlightening.

Accordingly, I will continue to warn bears that, until we see an impulsive decline, there's nothing to get excited about.  If this wave wants to turn into an impulse, then it can keep moving higher.  If it's only an ABC, then it could be close to completion, but it's better to await an impulsive decline for confirmation.  Even in that scenario, there's typically a rough retest of the high afterwards.  Until then, the near-term trend remains up.  Trade safe.