SPX Update

Last update noted that we appeared to have a potentially-complete five wave rally from early November (when five waves completes, it can mark a complete structure at the matching wave degree), and SPX seems to be acknowledging that inflection zone.

Big picture, SPX is still above the intermediate trend line, for now:

In conclusion, SPX has continued "hemming and hawing" around the intermediate trend line, but does remain above it for the moment, so bears have to respect that as long as it continues.  On another note, the market is closed on Monday, which gives me a long weekend from the updates, so I'll see you again on Wednesday.  Trade safe.

SPX Update

Last update noted that we could see some "hemming and hawing around the black line," and that's what we've seen since then.

Near-term, I parsed the wave going back to early November, and it does potentially count as a five wave structure within that time frame (not necessarily five larger waves since the September low, though).  More after the chart...

So... by "doesn't really fit," what I mean is that we wouldn't expect a third wave to show so much overlap... that suggests either it's a terminal structure that could reverse lower soon, or it's a subdividing third wave that could accelerate higher soon.  In other words, if nothing else, we can probably expect things to get a bit more interesting in the near future.  As long as bulls can sustain trade over the intermediate line, they're probably in good shape, but if they can't, then stay alert to the potential of a "surprise" correction.  Trade safe. 

SPX Update: No Change

Friday saw SPX back-test its most recent breakout (the blue trend line on the chart below), where it found support before rallying back up to new all-time highs:

SPX is thus currently still holding above the intermediate trend line:

In conclusion, we could see a bit more hemming and hawing around the IT trend line, but unless bears can whipsaw this breakout, there's no material change from the prior updates.  Trade safe.

SPX Update: IT Breakout

SPX has been fighting with IT resistance for months now, but finally seems to have cleared it.  Bears would need to whipsaw this breakout to maintain any hopes for the immediate future.

Near-term, SPX has finally spasmed its way up to capture the "if this is a third wave" target from mid-November:

In conclusion, after months of sideway-up consolidation, if SPX can sustain this breakout, it could be reasonably bullish for the foreseeable future.  Bears will need to whipsaw it fairly directly if they wish to keep themselves in the game.  Trade safe.

SPX Update: Head-fake, then Whipsaw...

Last update noted:  "bears have one last shot here, at an ending diagonal, which would head-fake over blue (chart above) then whipsaw"

And that's exactly what the market did on Monday.  Thing is, because of where it found support and the potential of a micro c-wave, Monday/Tuesday's action hasn't resolved any of the big picture questions yet.  Discussed further on the chart below (note: typo:  Should read "below 3660," not "below 3260"!  Thanks to Will in the forum for pointing it out!)

Intermediate term, we've been talking about this resistance trend line forever, it seems, and SPX still hasn't managed to sustain a breakout yet:

In conclusion, bulls aren't out of the running yet, but they do still need to sustain a break of IT resistance.  Bears need to first break 3662, then ~3640, but if they can, then they likely get to at least the zone near the pink trend line, if not below.  Trade safe.

Incidentally, I penned a short, slightly cryptic piece earlier, linked here.

Prologue

"A great civilization is not conquered from without until it has destroyed itself from within."

--Historian Will Durant

"The price of freedom is eternal vigilance."  --Aldous Huxley

The problem is always this:  Dangerous societal trends typically start small.  When problems are small, most people either don't see them, or don't view them as any kind of threat.  Of course, part of wisdom is seeing things not merely in terms of what they are today, but in terms of what they will become in the future -- seeing them as seeds that can grow into something larger.  Yet conveying this to others can be challenging, because:

1. "It's just a tiny problem!  You're making a mountain out of a molehill." -or-
2. "That's not a problem at all!  That's a GOOD THING."

This is how it will always be.  Yet once the trend has grown so large that everyone can see it, it's already massive and powerful, and thus too late to stop it.  

By the time everyone sees, the crisis is already upon us.

Our best chance of stopping a trend is, obviously, when it's still small and weak and lacks momentum.  But ironically, that's also when we're least likely to be able to rally any support for stopping it.  The problem is weak; but the probability of rallying a coordinated defense against it is even weaker.

This amazes me, because almost everything in life works this same way.  For example:  If we find termites in our home early and call the exterminator, we can stop them from doing too much damage -- but if we ignore them until they're "obvious" and can no longer be ignored, that means much damage has already been done.  Exterminating them and restoring the house to sound condition will be a much more difficult endeavor.

Almost everything that is now large had to start small.  Yet we, as a society, seem to repeat this mistake endlessly.  We can't seem to identify the enemy -- not because it's invisible (it's quite plain) -- but because it is small.

That's going to change.

Not overnight.  But as a parent whose children have not yet made their ways in the world, far too soon for my liking.  

We'll talk more about all this later.  

The price of freedom is eternal vigilance.

SPX Update: 2021 Arrives

As those of you who own calendars are no doubt already aware, 2020 is officially over.  Will things improve in 2021 -- and does it even matter to the market whether they do or not?  Our overlords seem intent on doing everything they can to create inflation, with everyone tripping over each other to see who can come up with the largest "stimulus" packages (and recall that inflation can be bullish for assets, including equities).  This is likely the fifth wave of a dying empire, so I'm sure our vaunted leaders will take us out with a bang -- while our criminally-undereducated masses cheer them on the entire way.  The handful of us who object will be branded as heretics and "deniers," especially since things will probably seem to be working... for a time, anyway.

Point is, money printing and debt and inflation, and all the things that ultimately lead to collapse, are actually insanely bullish for a while.  The problem is not that they don't work for a time, it's that they're not sustainable for the long haul.  Nor can they be easily recovered from.  Life is a constant negotiation of the present against the future (we must always consider how what we do today will impact us tomorrow), but increasingly, our politicians and the populace only care about what happens in the next five minutes, and "tomorrow" is rationalized away with magical thinking.

Anyway... a discussion for another time, perhaps.

At this point, SPX is again threatening the intermediate trend line. 

Near-term, the blue trend line seems to be the relative proxy for the IT trend line:

In conclusion, bears have one last shot here, at an ending diagonal, which would head-fake over blue (chart above) then whipsaw -- but if SPX can break out and sustain that break, then bears might want to stand aside for a while.  We'll see how it goes.  Trade safe.