SPX and INDU: Bears Still One Wave Short as Market Continues Wrestling with Major Inflection

Nothing has changed in terms of the big picture, as the market continues playing with the current major inflection zone.  In terms of the near-term, bears are a wave short of getting their needed impulsive decline (see second chart).

Near-term, this is my best guess as to how the wave breaks down (below).  INDU (not shown) counts similarly.  During yesterday's session, I expected SPX would probably tag 2970ish before rallying, given that the channel line was there, but it fell about 2 points shy -- which (for everyone's future reference) can signal selling exhaustion and/or heightened buying pressure (everyone is tripping over themselves to get in, so they jump the gun just a hair and buy prior to the market tagging support).

The classic TA chart from Wednesday had value on the way down, but if the decline was just a corrective ABC, will probably not have as much value on the way back up.  There's really no such thing as "resistance" in a bull market, except when INSIDE a corrective wave that's trending lower.  Once that countertrend move ends, near term resistance vanishes with it.  The same thing happens in reverse during a bear market ("no such thing as support, except during near-term countertrends").

In conclusion, bears need another low to get in the game for more than the short-term.  From a classic TA standpoint, the next intermediate support/resistance zones (first chart) still appear clear.  Trade safe.

SPX Update: Market Still in Inflection Zone

Not much to add since last update, except to note that the market has at least encountered some resistance at the noted inflection zone:

Near-term, there's not much to analyze yet from an Elliott Wave perspective, so I've sketched some of the potential support/resistance zones below:

In conclusion, the market has reacted to the inflection zone, but so far, there's not much data to be gleaned from this (so far) minor reaction.  If bears can form an impulsive decline, then we'll have a little more to work with.  Trade safe.

SPX and INDU: Inflection Arrives

Last update, we examined the big picture via INDU (SPX and INDU generally track very closely, so SPX would be expected to have extremely similar options), and noted that the market was approaching a potential inflection zone.  We are now into that general zone, though when dealing with very long term support and resistance, the market doesn't always turn on a literal dime, so the inflection reasonably extends a bit above and below the "exact" trend lines:

(typos:  "not the interesting confluence witht" should be "NOTE the interesting confluence WITH")

SPX has a similar appearance to INDU:

Although the next chart has the potential to "fail," I did look at the near-term to see how it compared:

Again, do keep in mind that the long-term trend lines may overpower the near-term "usual" expectations.  This is not a "usual" position for the market.

In conclusion, the market is now into a major inflection zone, as discussed in detail on Friday.  Now we'll simply have to see how it reacts.  Trade safe.

Inflection: A Look at the Long-term Bull Case vs. Bear Case

Last update noted that new a fourth wave could have completed on Tuesday, which implied new highs directly, and that's what happened.  We're going to take a break from the short-term today to examine the long-term in more detail.

Given the charts, it appears we're approaching a pretty significant inflection zone, which will likely either give bears a solid reprieve, or lead to a sustained resumption of the long-term bull rally.  Said another way:  If bears can't get anything done in the reasonably near future, we may see something approximating a redux of the relentless 2017 rally.

Let's look at the bull case first.  There are a couple ways to count this bullishly, and I've actually chosen the more conservative of the two to represent the bull count.  I mean, really, 10%, 30% -- what does it matter at this point?  If bulls push through here, then bears will probably just need to settle down for a while, and that's enough to know for now.

The first bear case option isn't anything new, and we've discussed it previously on several occasions -- the option for a massive expanded flat that leads back toward the December lows prior to a resumption of the rally and new highs.  (The second bear case of "alt: 5" is the "uber-bear" case.)

In conclusion, this appears to be a fairly important inflection zone for the intermediate term.  Since the trend (and thus the momentum) is presently up, bears have to treat that accordingly and await an impulsive decline before getting too excited.  As we always do, we'll track all that in real-time and burn that bridge when we come to it.  In the meantime, hopefully this helps people visualize where we currently seem to be in relation to the big picture.  Trade safe.

SPX Update: Short and Sweet

We're going to keep it short and sweet today.  As I noted in our forum early yesterday morning, we could have a complete ABC at 2963.  If that's what this is, it implies new highs directly:

In conclusion, there's still not much for bears to latch on to, and they need a sustained breakdown at 2963 PRIOR TO a break of 2994 to get anything going.  Trade safe.

INDU and SPX Updates: SPX Holds First Key Level

Last update called out 2968 as the most critical level for bulls to hold, noting that trade below that level would suggest further downside.  SPX then decline straight to that level (2967.97, to be exact), then bounced strongly for the remainder of the session.  This means bears still have work to do to reverse the prior trend -- their first task will be to hold Friday's high; their next task will be to sustain a breakdown at the blue dashed trend line:

I've drawn a couple of trend lines to watch on INDU, below:

In conclusion, due to Friday's decline bouncing right at the key level, the market really didn't provide much new information, so we'll have to see how today's session plays.  Trade safe.

SPX and INDU: Market Captures Next Upside Target/Inflection Zone

Last Monday's update listed 2990-3000 as the next upside target/inflection zone, and SPX captured that on Wednesday.  Futures are already indicating that the market is indeed reacting to that inflection zone, and the e-mini S&P futures have (as of this instant) dropped about 20 points down from their overnight high.

Before I go any further, I want to clarify something for folks who may not entirely understand Elliott Wave:  ABCs are corrections to the larger trend.  Yesterday, a (casual?) reader accused me of "doom and gloom," which I thought was quite odd, inasmuch as I've prefaced virtually everything, for years now, in the context of an ongoing bull market.  This is evidenced by the fact that all of my projections have shown the decline waves as ABCs, not as primary first waves.  Even the potential larger C wave we've entertained on and off for the past couple months (and always conditionally entertained, at that) is ultimately the complete opposite of "doom and gloom" -- a C wave is always the final wave of a correction.  In other words:  a C-wave is not the start of a new primary downtrend, it's the end of a corrective countertrend decline -- thus it leads to new all-time highs.  In my mind, remaining long-term bullish, as I've done for a long time, is... well, it's the exact opposite of "doom and gloom."

I do try to identify the inflection points where bears may have a chance for at least a bit of short-term or intermediate-term relief, because, really, what else is there to do in a bull market?  And there's always money to be made on both sides of the trade.  Anyway, I think I've done a pretty solid job of identifying those inflection zones, as the market reacts to them with pretty regular consistency.  I've likewise done a solid job of identifying the inflection zones where the decline could end and turn back up -- and I try to warn bears to be cautious at such times, as I did on June 3 (see: Market Reaches First Important Inflection Zone).

But the broader point is:  ABCs are corrections against the next larger degree of trend.  If I give a projection for a decline and it shows ABC on the chart, then it's not "doom and gloom" -- not yet.  To the contrary:  It's long-term BULLISH.

Anyway, that concerned me, because I certainly don't want readers mistakenly thinking every ABC to the downside is the end of the world; it's not.

Moving on to today's charts, SPX ran right to the upside target/inflection zone, and the market is reacting to it.  I can't say for sure that "this is the last stand" for bears, but as I noted last update, they're running low on real estate, so if they can't hold the stand they're attempting here, they'll probably have to kick back and watch for a bit.

There really wasn't anything to add to INDU's chart:

In conclusion, the market has captured the prior target, and is reacting to that inflection zone.  As usual, the first step for bears to solidify their chances will be to form an impulsive decline.  If they can't, then the uptrend will continue.  If they can, then we'll look at solidifying some concrete downside projections.  Trade safe.