SPX and NYA: Decision Time

 On August 25, I wrote:

Wave iv (not its real name) could, of course, become even more complex -- but that may have been enough chop for now. A sustained breakout over black likely gets us to at least 4530-50, possibly much higher if 5 chooses to extend.

And, after the prescribed breakout over black, that target was captured on Monday, with SPX tagging ~4537.  This has left SPX in an interesting position:

(Note:  Typo -- should read "4480-4495"!  Not "4480-4995," for crying out loud.)

Bigger picture, we may finally be getting close to learning if this wave wants to extend or not:

NYA still hasn't managed a breakout over the first red line, so that's relevant for now:

In conclusion, the "standard" fifth target zone of June 7 (4480-4550) has been almost fully captured now, placing SPX at a decision point (see first chart).  While a whipsaw of black wouldn't be the end of the world for bulls (see smaller subdividing bull 1 of iii of (v) option), it could be a warning of more bearish things to come, and thus harder to trade -- accordingly, bulls would like to see this back test of black hold for the near-term.

On an unrelated note, this year marks the 20th anniversary of 9/11, and I can highly recommend National Geographic's new 9/11: One Day in America miniseries.  My wife and I have almost finished watching the series, and it does justice to the great men and women who suffered through that tragic day.

Trade safe.

SPX and NYA Updates

On Friday, I warned that bulls needed to get moving, and SPX rallied to new ATHs, but then stalled at the oft-discussed black trend line:

NYA rallied up to red:

This week could finally resolve this months-long range. SPX is still sitting inside its target/inflection zone, so bears still have a shot to push back, but if they can't offer resistance, a sustained breakout has the potential to trigger the market into an extended fifth.  Trade safe.

SPX and NYA: One for the Bears

Last update noted that a sustained breakout over the long-running black trend line should get SPX into the upper portion of the standing target range (4880-4550 is the range from June 7) -- but it again failed to break out.  This brings up another point:  We are still inside the Wave 5 target range from June 7!  And that means bulls should not be complacent here, because the current wave has done what it needed to for now, and does not "need" to continue to rally.

I wanted to take another look at the hourly chart, and lo and behold, it's not even a stretch to fit a diagonal onto this pattern; it actually fits rather easily:

Looking at the above chart, we can see there are now two valid ways to count us as in a fifth wave (at the degree shown above), so bulls are almost into territory where they NEED an extension to keep this rally going.

No change on the long-term chart, but we did rally almost to the middle of the target range... so we don't "need" to keep going; the minimum requirements have already been met:

NYA is interesting as well:

In conclusion, while it may be hard not to get lulled into complacency here, we should remain mindful that the market is into its upside target zone, which is territory where bulls are going to need to prove themselves with a sustained breakout, both in NYA and SPX.  If they can't, then we can see that the downside potential is not insignificant.  Trade safe.

SPX Update

On Monday, SPX made a new ATH, thus fulfilling the prediction for a complex iv:

Wave iv (not its real name) could, of course, become even more complex -- but that may have been enough chop for now.  A sustained breakout over black likely gets us to at least 4530-50, possibly much higher if 5 chooses to extend.

Bigger picture, no change, and red held the decline:

In conclusion, the prediction for a complex iv played out... barring the market adding another complex wave onto the existing correction, we could head higher, into the next target zone, over the coming sessions.  Trade safe.

SPX and Gold: No Material Changes

SPX has continued to bounce out of the bull: iv inflection zone, so there's absolutely nothing to add since last update:

Gold has also continued to hold its downside target, and has now bounced more than 100 points, to back-test blue.  Bulls want to see that zone reclaimed.  On the downside, the key zone remains the same zone I previously identified, and in the event the inflection zone low were to fail markedly now, they'd want to be exceedingly cautious, as a breakdown there could hint at a bear nest:

In conclusion, no material change since last update.  Trade safe.

SPX Captures Downside Target Zone

On August 4, I wrote:

[T]here are enough waves for a completed correction if the market wants, but I suspect the current correction may grow more complex, and thus we could see more chop before it's all over. That's not guaranteed, of course, as predicting complex corrections is far from an exact science -- so in the event it instead continues to rally, then we would watch the upper black trend line (on the near-term chart) as a potential upside pivot.

SPX never sustained a breakout over the black pivot, and I continued to publish a chart showing a move down below 4370 SPX.  That was actually a hard call to make on August 4, and remained a hard call to stick to (given that complex corrections are almost impossible to predict even in a normal market, and even more so in this Fed-driven market), but that prediction finally came to pass on Wednesday, with SPX capturing its downside target as shown:

Bigger picture, after capturing the 4480 upside target (originally from June 7), SPX reversed and found support at the red intermediate trendline:

Also, in the event the above-noted support zones break for more than an instant, it remains worth knowing that there are technically enough waves for a complete 5 of 5, if the market wants:

In conclusion, SPX captured its first downside target zone and bounced.  This is okay as long as that zone continues to hold, but in the event it sustains a breakdown at the noted support zones, then bulls might want to be extremely cautious and await an impulsive rally before getting too aggressive again, because if those qualifiers get met, then there's at least the possibility that 5 of 5 is complete.  Trade safe.

SPX Update: June 7 4480 (+) Target Zone Finally Captured

Since last update, SPX made a new ATH and officially captured the 4480 target (to the point) from June 7 -- before reversing hard.  The jury is still out as to whether that's just a one-off reaction to the lowest point in the target zone (this first zone stretches as high as 4550).  Nothing informative has happened at the intermediate level yet.

Near-term, the picture is similar:  Nothing informative has happened yet.  The more complex iv is still on the table, but so far, it appears to be only three waves down from the ATH.

In conclusion, while there was an impressive reactionary decline in response to the capture of the lowest end of the target zone, the next thing bears would need to do is sustain a break of yesterday's low.  If they can't do that, because the decline appears to be three down, it could be a simple ABC.  For the moment, we'll have to see how the market chooses to resolve this before the picture clarifies.  Trade safe.