SPX and INDU: New Charts!

On Monday, the market did something different:  It traded as if it was open, and there were actual live people placing trades.  If you can imagine.  In honor of the market doing something different, I've drawn up a (drumroll please) NEW CHART!

And an edumacashunal chart (to further your continuing edumacashun), at that, which depicts the potential of a classic "expanded flat" pattern.  The most recent high is far from being a "clean" five wave structure (b-waves highs are corrective, not impulsive), which is one of the reasons we do have to be alert to this potential:

On the flip side, bulls do need to get back above the black trend line:

In conclusion, bears finally have an impulsive decline, BUT it's possible that's wave C of an expanded flat.  The most recent low (2767) is thus the first important dividing line.  Trade safe.

SPX Update: Still the Same... for Now

Last update noted that there still appeared to be little hope for bears, outside of a more complex short-term correction, but that even if there was such a move, it would still be expected to be "just a correction" (meaning the larger trend would remain "up") -- at least for the time being.

Nothing much has changed, and there are still no signals suggesting the rally has ended.  All of that can always change tomorrow -- the market can change character on a dime, and it usually announces that fairly clearly once the first turn happens.  But for right now, the uptrend is what it is and must continue to be respected as such.

In conclusion, nothing much to add (as usual lately!).  I did note a few potential resistance zones on the chart above, but as I've said many times, until we see a clean impulsive decline, the trend remains up.  Trade safe.

SPX Update: Witty Yet Germain Update Title Goes Here

Last update suggested that SPX might need another near-term wave down, and that wave down then materialized later in that session.  That now creates the appearance of a three-wave structure from the most recent high to the most recent low.  Three wave structures are generally corrective in nature (for example, an ABC is three waves -- and, of course, those waves are labeled as Wave A, Wave B, and Wave O, for "OMG this market!"  Wait,  I mean Waves A, B, and C, for "Crikey, this market!")

Let's take a look at the most recent SPX chart:

Ha ha, just a little technical analyst humor there, designed to elicit angry responses from the type of people who are offended by everything they read on Twitter.  (Now I just need to post this on Twitter, which I keep meaning to use but almost never do.)

Let's take a look at the real chart now, which, in many places, looks basically the same as the one above.  We can see the new blue channel has held the recent decline:

In conclusion, there appears to be a three wave structure heading down from 2813 to the most recent low, which suggests that the rally isn't over yet.  Bears could get a more complex correction, which would test the high then dip below that low, to work with, but it would likely still be "just a correction" (not a prediction, by the way, just an option to be aware of).  Trade safe.

SPX and INDU Updates

Let's get right to the charts.  First up, INDU is working against an obvious channel:

INDU closed near support, so we'll see how it reacts to that today.

SPX seems to have shifted into a new near-term channel -- the blue channel, which I drew on the chart a few days ago:

SPX MIGHT need another near-term wave down, but it's not entirely clear to me at this moment.

In conclusion, SPX has run a little past the dashed red resistance zone, but is presently back-testing that zone.  A sustained whipsaw back through the lower red line could generate a larger sell-off, if that were to occur.  If it holds the breakout, then it would be back to "business as usual."  Trade safe.

SPX: A Less Boring "Boring Update":

So far, no matter what has happened, the market has continued relentlessly higher.  This is sometimes called "bad news is good" sentiment.  In this case, not only is bad news good, but also good news is good, no news is good, news about cats is good, and news poorly translated from a foreign language is good (headline:  "Dow Rallies 500 Points on Announcement that China Will Cease Importation of Bite the Wax Tadpole."   Later correction: "Earlier, CNN erroneously labeled 'Coca-Cola' brand soft drink as 'Bite the Wax Tadpole.'  Also, the Dow rallied 7000 points, not 500.").

(Random Factoid:  I'm actually not making up "Bite the Wax Tadpole" as a bad translation for the infamous soft drink:  Coca Cola: Bite the Wax Tadpole?)

Basically, "everything is awesome."  At least as far as the market is concerned.  Which is why we haven't been getting too gung-ho on bear options.  About the most I've been willing to do in terms of bear predictions has been tepid "eh, maybe" calls, such as on Friday:

If bears can push below yesterday's low, they could get something going in terms of a larger correction.

As it turned out, bears were unable to move the market below Thursday's low, because of course they were.  So the "if" part of the "if/then" equation never came to pass, and bulls thus knew they were free to grind the market in a circle for most of the session, which is exactly what they did.

While it's never good to trade "for excitement," trading and charting are two different animals.  Obviously, in terms of only what I publish in these updates, I'm charting as opposed to placing trades WHILE I chart -- and frankly, I find markets like this one incredibly boring to chart.  And not very interesting to write about.  Partially that's because I've learned over the years that there is a great temptation to try to "find something interesting" to write about -- but in the case of a trending market, that temptation can be dangerous, because the fact is, there IS nothing interesting to write about.  Every update in a market like this could basically read:

"Second verse, same as the first."

And I could keep publishing the same chart over and over without even updating the price action, and probably no one would even notice... unless I accidentally spilled ketchup on it or something.

The point is, this is why I've been keeping the updates short for the past month and a half or so.  Because while I've seen a couple, "eh, maybe" moments here and there, for the most part, there hasn't really been much to say.

And for bulls, that's a good thing.  It's probably a good thing for bears, too, because there's nothing worse than constantly thinking that THIS IS THE TOP OMG OMG OMG, only to have the market blow right through it again and again.

If it's at least a tradeable top, that's not so bad -- but in this market, we haven't even seen any tradeable tops since December.  So in that sense, I'm thankful that I've mainly stuck to "boring updates" through the majority of this move (and, as a general rule through the years, through these types of moves).

Eventually, the market will get tired of rallying, and while we don't always catch the exact top (sometimes we do), we rarely get caught looking for more than a session when the trend does finally change.  And as I see it, missing the first session (or even two) of a turn is vastly preferable to shorting the whole way up.

Last update noted that "if bulls can reclaim the channel, then all bear bets are off" -- and bulls are in the process of doing just that:

So all that to say (yet again):  As long as SPX fails to sustain a breakdown, there's nothing for bulls to do but ride the trend, and nothing for bears to do but keep waiting.  Trade safe.

SPX Update

Last update noted that the market had reached a potential resistance zone, and so far it has at least reacted to that zone:

If bears can push below yesterday's low, they could get something going in terms of a larger correction.  If bulls instead reclaim the channel (and the prior high with it), then bears are back to awaiting more propitious times.  I tend to suspect bears might finally be due a correction, but this rally has been pretty relentless so far, so we'll see...  Trade safe.

SPX Update: A Great Market for Spearfishing

This remains an exciting nail-biter of a market, by which I mean it's a great market to consider taking up a hobby like skydiving or spearfishing... or even something truly daring, like stamp collecting, which is considerably higher intensity than this market has been lately.  VIX is still hovering around 15, although by all rights, given the price action of late, VIX should be trading at zero or below.

SPX ended up capturing Friday's "if/then" target that very same session, and has finally reached/is reaching its most recent intermediate resistance zone, so maybe the market will react to that and give us something more exciting to trade:

In conclusion, SPX has been trying to lull everyone to sleep, and it's done a darn good job, so maybe that complacency combined with the current resistance zone will finally spark a little volatility back into the market.  We can only hope.  Trade safe.