SPX Update: Decision Time

SPX has continued to bounce from the gray inflection zone called out on Friday:

If this decline is to become (at least) two-legged, then bears need to do something soon.  Because my comments in the prior update were a bit heavy for some, I also want to note that even if it does form another decline, that decline could still be wave C of 4... and even if it doesn't there is always the possibility of an extended fifth rally (as I've discussed many times previously).  Trade safe.

SPX Update: Morning Frustrations

So I was roughly done with the update before open, but am now about to throw eTrade through the window.  Last week plus has been nothing but trouble in the morning.  Anyway...

Last update (and Wednesday's forum call) expected that SPX still needed lower prices, and the market obliged, dropping down to the gray "4?" inflection zone before bouncing:

The decline from the all-time high was impulsive (five waves down), so the question now is whether the high is a B-wave (making the decline a C-wave) or not.  If it's not, then we have an impulsive turn, which would be either 1 down of a NEW BEAR MARKET (likely the generational SuperCycle Bear we've discussed previously) or A down of a correction (to be followed by a bounce in B, then C down).  I'm leaning very slightly toward the decline being 1/A down and not a C-wave, but we'll take it as it comes.  Trade safe.

SPX Update: No Surprise

Last update noted that a five wave rally at larger degree had likely completed and thus that we could expect a larger correction in either the lingering potential for a (gray) 4, or worse, and the market obliged.  

In the forums on Wednesday, I noted that if SPX bounced from Wednesday's low, we would likely run up north of 3810 before declining back to new lows (as the low would appear to be wave b of an expanded flat).  On Thursday, I then called out the price zone in real time (3825-30) -- and the market topped there and appears on its way to confirming the read that the low was indeed the b-wave of an expanded flat.  (Do note that the screwy thing is that SPX only needs to break 3767 to resolve that pattern in a technical sense.)

Bigger picture, the question is whether this is gray 4 or we've seen ALL OF 5.  I'm leaning toward all of 5 having completed, but it's just a very slight lean at this point.  Do note that if ALL OF 5 has completed, we may have just seen the completion of Cycle 5 and thus a SuperCycle top (a massive, generational top that could take SPX back into triple digits)... but again, first things first and I'm not quite ready to declare that with any conviction yet.  For one, we still have only three waves down from the ATH... and if the next wave completes by breaking 3767, but shy of Wednesday's low, it will make my work more difficult.

In conclusion, SPX continues to follow the recent projections, and we'll await its next move before getting too hung up on the very long-term picture.  Trade safe.

SPX Update: On Target

Recent updates discussed that the last decline was most likely a micro fourth wave (of course, discussed while the decline was unfolding), which would lead to new highs in the fifth wave, which could then (by implication) wrap up a larger rally wave (hence the 3/5 label at the projected new high).

Recent updates also had the rising red trend line pegged as "first meaningful support" -- and the market has since declined to test red, then bounced up to new highs, which could thus complete the larger wave.  So the question now is primarily whether this will mark a near-term top (for grey 4? if the ATH marks the peak of blue 3) or an intermediate/long term top, if the rally was ALL OF blue 5:

In conclusion, the last few updates have been on target... now we simply have to see how it develops from here to determine if this is a minor top or a major top.  Note that the red trend line is no longer necessarily meaningful support, and we'd look to the lower blue rising trend line if red fails, then potentially toward 3700-19 if that were to fail... then toward the blue horizontal if that were to fail.  Trade safe.

SPX Update

Not much to add since last update.  SPX found support right where it was sketched on the chart, which fulfils the minimum requirements of a micro fourth wave:

Other than that, nothing to add to the past few updates.  As a reminder, the blue and red lines are first meaningful support, the overhead black line is next meaningful resistance.  Trade safe.

SPX and INDU: Interesting

 

First up, let's look at a version of the long-term INDU chart that we haven't looked at since March, mainly because I want to call attention to the large megaphone:

Near-term, we're probably not quite there yet... though I presently trust this market about as far as I can throw it, so I'm open to anything here.

In conclusion, we have some interesting things to watch heading forward, as this last bit of long-term peacetime prosperity unwinds.  Trade safe.

SPX Update: Downside Target Captured, and Support Then Holds

Today is 1/20/2021, which makes it an rare palindrome date (I have no comment about that, but thought it interesting).

Last update suggested that a trip to the 3760s in SPX wouldn't be unreasonable, but that we wouldn't look too much lower unless "red support" (chart below) failed.  Red support was then tested basically to the penny, and held.  Bears thus would still need to break support to get much more going.

Note that I have "4?" shown in gray -- this is because I'm not convinced this is wave 4 at the degree that's labeled (it was a bit short for that), so we might not be onto the larger 5 yet, but may still be in 3 (hence the higher blue "3?").

Bigger picture, we have indeed "hemmed and hawed" around the IT line, but that may finally change now that we've tested and bounced from support.

While looking through my chartbook, I also came across an old legacy COMPQ chart, which I found interesting:

In conclusion, SPX held support and COMPQ is also above a long-term trend line... as I've said for a while, IF these breakouts can hold, then bulls can run it notably higher.  To break things, the first level bears would need is now clearly defined at 3749.  Trade safe.