SPX and INDU: Noise, Noise, Noise

No change from last update, which expected SPX would likely push on toward 2990-3000 before it had a chance to give much consideration to doing anything else.  In regards to the big picture, this pattern is shaping up to be the toughest we've seen in at least two years.  Because there are numerous options on the table, we're presently in an extremely difficult position in terms of reconciling the potential counts.

Recall that there are at least two possible bull counts:

1.  The current rally is a low degree fifth wave of a higher degree fifth wave.
2.  The current rally is a higher degree third wave of a higher degree fifth wave.

The first of those counts leads to a bit more rally, and then a stall and larger correction.  The second count leads to a relentless rally.  The first count could even be considered near-term bullish but bearish at larger degree (at least bearish for long enough to matter -- probably still unlikely to be "the end of the bull market" though).  The bear counts at this point are complex corrective waves that are intermediate bearish but long-term bullish.

In other words, because of what preceded the market's current position, we're wrestling with a high degree of interference noise in the charts right now, and we simply can't "wish it away," but must respect and work within the limitations it creates.

No change to SPX:

INDU:

In conclusion, thanks to the sideways grind that began in 2018, there's too much interference noise this close to the range to sort these options out yet. Thus I'm contenting myself to attempt to deal with the near-term for now, and we'll build larger implicit structures if and when we can do so with more accuracy.  Trade safe.

SPX and INDU: Market Reaffirms the Importance of Impulsive Declines

So, given where futures are this morning, I'm trying to decide if I should berate myself or not.  While I was very slightly leaning toward the bigger picture bear case, I feel the last two updates were pretty clear in warning that bears had nothing to latch onto yet.  On Wednesday, I wrote:

Monday's update noted that SPX appeared to have formed a potential ending diagonal terminal pattern at Friday's high, and gave the first key level for bears to claim as 2940 SPX, with that statement that: "Much below 40, and bears could take aim at 2915ish." Yesterday's low was 2916.01. 

Now, one of the reasons I called out the 2915ish zone is because there is some potential support in this zone, which usually means a bounce (futures are already indicating that the market is indeed reacting to this support zone), and CAN mean much more than a bounce (i.e.- the end of the decline). Given the nature of the pattern, I'm not currently favoring the decline being over just yet -- but I should note that (as long time readers know), I'm something of a stickler for impulse waves as an "official" signal, and we do not yet have a complete impulse down -- so if the market wants to do something screwy here and get bulls back in the game, I can't guarantee that it doesn't.

And then on Friday, I reiterated "no change" and added:

As I noted in the last update, bears do not yet have an impulsive decline to latch on to, and that remains the case as Friday begins.

I also reiterated on the SPX chart that "if the market is going to bounce, even up to new highs, this is still one zone where that bounce could begin."

So I'm thinking I probably should be glad that I was able to both hit the near term price targets and correctly identify the inflection zones.  I mean, those are probably fairly decent accomplishments in and of themselves.

If nothing else, the market's behavior has reaffirmed why I'm a stickler for impulsive declines.

But I still can't help but feel a little disappointed that things don't seem to be working out for bears in the bigger picture.

In conclusion, we'll give the market a little more room here, but very much more upside (i.e.- much beyond the noted 3000 SPX zone), and we'll probably have to put bear counts back on ice for the time being.  Trade safe.

SPX and INDU: Market Stuck on Pause Since Last Update...

Unfortunately for all of us, there's been no material change since the last update.  The market has simply spent the past few session range-bound in a sideways grind (in fact, it's only moved 7 points in absolute terms since Wednesday).  As I noted in the last update, bears do not yet have an impulsive decline to latch on to, and that remains the case as Friday begins:

INDU has likewise not broken through its first meaningful support zone yet:

In conclusion, there's no material change from the last update, and the market is stuck in something of a no-man's-land.  Hopefully things will resolve in the next few sessions.  Trade safe.

SPX and INDU: First Downside Target Captured, but Bulls Not Knocked Out Just Yet

Monday's update noted that SPX appeared to have formed a potential ending diagonal terminal pattern at Friday's high, and gave the first key level for bears to claim as 2940 SPX, with that statement that:

"Much below 40, and bears could take aim at 2915ish."

Yesterday's low was 2916.01.

Now, one of the reasons I called out the 2915ish zone is because there is some potential support in this zone, which usually means a bounce (futures are already indicating that the market is indeed reacting to this support zone), and CAN mean much more than a bounce (i.e.- the end of the decline).  Given the nature of the pattern, I'm not currently favoring the decline being over just yet -- but I should note that (as long time readers know), I'm something of a stickler for impulse waves as an "official" signal, and we do not yet have a complete impulse down -- so if the market wants to do something screwy here and get bulls back in the game, I can't guarantee that it doesn't.

Again, though, I'm not presently favoring that, but bears shouldn't get too complacent here.

Bigger picture, bears have kept alive the deeper corrective C-wave decline, which ideally would take us down below 2802, and in a perfect world, back toward the 2710 zone (possibly beyond -- we'll worry about that if/when we get there).  I still haven't updated this chart since June 21 (partially because there's been no need to):

INDU is in a similar position to SPX (as usual):

In conclusion, everything is going as well as it can for the preferred count as of this moment, but it's not uncommon for the market to react to inflection points (such as last week's B-wave inflection) -- so, because we do not yet have an impulsive decline (only 3 waves down -- and the 3 waves could even support another new low without forming an impulse yet), we have to at least respect that there's been no "official" knockout dealt to the bulls.  Thus, while things are proceeding in the right direction, bears should still remain on their toes for the time being.  Trade safe.

SPX and INDU: Bears Give Themselves a "Maybe" -- for Now

While not much has changed in terms of prices since the prior update, the market has now opened up a bear potential.

Given that this pattern could also be a bullish b-wave high (which we could learn as soon as today or tomorrow's session), I would like to see a little more from the market before calling it more than a bear "potential" at this point.

Bigger picture, nothing has changed since the prior update, and I haven't done anything with the following two charts, since if I try to so much as adjust a label, I run the risk of offending the StockCharts gods, which causes them to delete entire annotations while laughing diabolically.

Nothing changed on INDU's chart either:

In conclusion, bears do at least have an opportunity to do something here, but I can't say for certain whether they will or not, and await a bit more info from the market before making firmer proclamations.  But at least for now, this does keep the bear case very much alive.  Trade safe.

SPX and INDU: Blowout or Fakeout?

Well, the June rally pushed just a hair farther than we were hoping, and in so doing, makes my analytical life more difficult for the moment (you'll see what I mean).  It also knocked out a portion of the bear count, but not the entire bear count just yet.  One of the rules of Elliott Wave is that second waves cannot retrace more than 100% of first waves -- however, B waves CAN retrace more than 100% of A waves.  So the potential of June rally as c of B is still on the table for the moment.

There are two additional counts that we now have to consider as well.

1. The most bullish count would be for the recent correction to have been a HIGHER DEGREE second wave.  This would make the rally from the December low to the May high a large first wave, the recent decline a second wave, and a huge third wave rally underway now, to ultimately run toward... (goes into coughing fit)… 3700 SPX.  I'm not sure I'm ready to get on board with that just yet, though.  So another option would be:
2. That the most recent corrective decline was wave 4 of the rally since December, with the new all-time high (in SPX) being wave 5 of the rally since the December low.  That would mean that an even deeper correction would begin after wave 5 completes.

See what I mean about the market now making my analytical life difficult?

This is one time the charts aren't a huge help at this exact moment.  There's really nothing in them that gives either of the above reads a distinct edge -- so for the moment, I'm going to continue to give the most consideration to the idea of a B-wave high.  At least for now.  The caveat there is that in the event this IS a big bullish third wave, or even the smaller bullish fifth, it could push higher for a while if it wants.  Bears should choose their battles carefully.

SPX has formed an interesting larger channel:

In conclusion, this is a pretty major inflection point now, and the market has two options that will call for more correction, and one option that calls for a blowout rally higher.  Given the fundamentals, I'm having a hard time getting on board with the blowout rally just yet, so we'll see how things shake out over the next few sessions, and hopefully the options will begin to narrow a bit.  Trade safe.

SPX and INDU: Moment of Truth Finally Arrives

A little more than a week ago, I published a one-minute chart and described an expanded flat as the preferred count, which would still need higher prices:

So this gets pretty tricky now, because we DO have an impulsive decline, but if the read above is correct, then that impulse is wave C of an expanded flat -- which would mean things are about to get whippy -- perhaps with a fake-out breakdown near the low, then a run back toward/beyond Tuesday's high, which could then mark the completion of wave 5 of C and reverse AGAIN heading lower.

I noted that I wave favoring higher prices by a 55/45 margin, and yesterday that count was finally validated by the market.  I should note that that NEAR TERM preferred count (of an expanded flat) being correct does NOT impact the larger count in any way.  In other words, sometimes I can make a read such as that one (which, in its simplest form was: "market still looks headed higher") correctly, but that doesn't mean that the next HIGHER degree wave will do what we "want" it to.  There are enough waves for C of 2/B to finally be complete, though, so...

In terms of the bigger picture, the "moment of truth" is finally here:

SPX is in a similar spot -- NOTE THE TYPO -- "2895" should read "2955" ("invalidated above 2955"):

In conclusion, both the preferred AND alternate counts had us pointed higher until this moment, but now they begin to diverge.  Fortunately, the market has rallied enough that the risk to bears is relatively minor against the all-time-high in SPX.  Beyond that, there's not much to add; now it's simply up to the market to "do or die," and it seems to be content to let the Fed "decide" its fate.  Trade safe.