SPX Update: Oh What Fun

Last update noted that 4193 was the first key overlap, and the market recognized that zone as bears initially made a convincing stand just shy of it... but they were unable to push through, and yesterday's decline found support at the trendline connecting the March lows with the May low, launching SPX back up to retest the ATH.

I've been charting the market for decades now, and can't recall too many markets that were this, for lack of a better term, "screwy."  The near-term patterns are still playing by the rules, but are blowing many of the "guidelines" (meaning: "typical historical market behavior") out of the water.

Which is one of the reasons I haven't been keen to get too fancy, or locked-into any linear thinking, on the projections... and Monday's update concluded with a simple thought:

Either way, the market is still pointed higher, either immediately, or after said correction.

And thus we now find ourselves back into a sort of "projection no man's land":

In conclusion, the market has been in a trading range for the past month, so there's not much else to draw from this pattern other than the aforementioned "still headed higher" and "near-term, here are the things it could be" -- which we've done for the time being.  Eventually the market will start behaving like a market again.  Trade safe.

SPX, OEX, and SPX Again

Ever since we unlocked the secret that no other society in history was able to unlock (namely: "how to create endless wealth without actually producing anything"), the market has continued to act a bit screwy.  Yesterday was no exception, nor will today be.  This is the one constant of late... call it the Powell Certainty Principle.  

Interesting to note that OEX (the S&P 100, which consists of all the companies who have charted at least one Billboard Top 40 single during the past year, such as McDonald's, with their number one hit "I'm Lovin' It") reached the equivalent zone that SPX was "supposed" to.

Bigger picture, SPX still hasn't tested green.  There is, of course, no rule that says it has to...  hang on, I've just been handed the rule book from my research team (our cats) and on page 30, Section 10, Paragraph III it says, and I quote:

"WE NEED MORE FOOD YOU MORON"

So I stand corrected.  But SPX still hasn't tested green, of that much I'm certain.  (Also, I just noticed that every subsection of this so-called "rule book" contains that exact same sentence.)

In conclusion, if bears can hold 4193, then the market could still be on track for a test of the green trend line (or below).  If they can't, then the diagonal outlined on the first chart would become one possibility.  Trade safe.

SPX Update: The Options in More Detail

First, I apologize for taking an extra day off and missing Friday.  Truly, though, there was not much to add, and both options discussed in the prior update are still on the table.  I've drawn them in more detail on the chart below:

Interesting to note how the expanded flat (discussed above) would shake out on the bigger picture chart:

In conclusion, while expanded flats are completely unpredictable, I somewhat like the idea here, as it would accomplish a successful backtest of the long-term green line before rallying up to new highs.  We'll see if the market likes that idea, too.  Either way, the market is still pointed higher, either immediately, or after said correction.  Trade safe.

SPX and COMPQ Updates

Last update noted that SPX and COMPQ had both reached support and could bounce directly... while in the forum, I mentioned that my first instinct was that Thursday's high was a b-wave (suggesting that the decline was wave c of an expanded flat, and thus that the market would rally back beyond Thursday's high).  And while the ferocity of the decline on Thursday made it a little less certain, the market rallied from the open on Friday, and first instinct won out in the end.

Where we are now:  Either in the midst of a third wave up from last week's low, or in the process of forming a more complex flat.  If we're in the middle of a third wave, then bulls have the ball and won't look back for a while.  If the market is going to form a more complex flat (unpredictable, but would work well here), then SPX would top soon (may or may not need another slight new high) and head back below 4118.  A typical retrace would be 110-117 points off the prevailing high; in other words, if the current high of 4194 were to begin a flat, then 4070-80ish would be the typical target zone.  That would make the ATH a b-wave and lead back to new ATHs after the correction completed.

COMPQ would perform in a similar way:

In conclusion, no big surprises on Friday, and now the market has a couple options.  For greatest confusion, it could opt for the expanded flat, but that type of correction is largely unpredictable at this stage.  On a side note, I'm going to take my wife's birthday (Wednesday) off from the updates, so I'll return on Friday.  Trade safe.

SPX and COMPQ Updates

Last update noted that if SPX could clear the black line immediately overhead, it would likely generate a larger bounce.  SPX did clear black -- and again proved the value of the near-term chart below:

Note that the potential second target above (in the event of a breakdown) lines up roughly with the green line below:

COMPQ bounced from the median channel line, and has since dropped back to it (I'm not updating this chart because Stockcharts is doing that thing where it deletes all my annotations if I update):

In conclusion, the market rallied to resistance yesterday, then was rejected straight back to support (so could bounce today, if it so chooses).  In the event support fails, we have our next potential targets.  Trade safe.

SPX, NYA, COMPQ: Market Reacts to Noted Resistance

Last update proved quite timely, as it warned that multiple markets had reached resistance zones, which could precipitate a correction -- which is exactly what happened.   Most interesting to note that Elliott Wave pointed the way to this correction well in advance via COMPQ, and we were able to identify the resistance zone before the market got there, even without looking at classic TA trend lines:

The near-term support and resistance chart again proved useful:

NYA reacted to its major trend line for the fourth straight time (or reacted to the alt. count, with the "alt. 5" label unmoved since April 7, if you prefer):

Bigger picture, SPX is still above its next major support zones:

A slightly different angle:

In conclusion, keeping things as simple as possible:  The market is in a clear near-term downtrend at the moment, so the first step for bulls is to break out of the down-channel (along with breaking back above the black trend line on the SPX near-term chart; second chart).  If they can do that, then they could put together a larger bounce --- but until they do that, the market will remain in a downtrend.  Trade safe.

SPX, COMPQ, NYA: Tagging Resistance

So a few markets now are testing resistance zones.

COMPQ, as previously discussed:

 

NYA:

And SPX:

We do not yet have any impulsive declines to form a more concrete opinion, but if resistance behaves as resistance (which it does not always do -- otherwise, there would be no bull markets, just centuries of sideways grind), the market may pause/correct a bit here.  We'll be on alert for an impulsive turn to signal whether that's going to happen in this case or not.  Trade safe.