SPX Update

Not much happened on Friday, with the market spending most of the day range-bound, so there's little to glean from that.  Futures made a new high in the overnight, but cash is ultimately king.

Nothing new on the intermediate term chart:

In conclusion, we're in much the same place we were Friday, with the addition of the knowledge that ES futures made a new high -- and that might give bears at least some cause for caution.  That said, cash matters more than futures, so we'll see how the market reacts today.  Trade safe.

SPX Update: All the Marbles?

SPX ended up staging a strong rally from the ~4300 support zone, but has so far only rallied in three waves.  The next few sessions may thus end up being for all the marbles.  

Rejected at the red upper channel boundary on the larger chart:

In conclusion, the charts say it all, and "the fate of the free world" may hinge on the next few sessions.  Trade safe.

SPX Update: No Material Change

 So far, nothing to add to last update, except to update the charts:

Closer view:

In conclusion, no material change from last update -- so far, anyway.  For information sake:  If bulls were to sustain trade above the 4450 zone, it might get a little tougher.  Trade safe.

SPX Update: Bears Sharpening Their Claws

 On August 27, I warned:

[W]hile 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.

On September 10, I reiterated:

Do continue to keep in mind that the ATH does mark a potential MAJOR inflection zone, inasmuch as it could have completed an ending diagonal fifth (as we previously discussed -- thus, "major" as in: It was a possible "end of the 12 year bull market" wave).

In that update, and in every update since then, I've warned that more downside looked probable.  And yes, it's still too early to tell if the bull is completely dead, or if this will just turn out to be a scary "correction."  But we can't ignore that the market captured the standing upside target, then reversed -- and has continued breaking each key level I've outlined as "the next warning zone."  So, because I sometimes tend to warn softly, I want to make this as clear as possible:  

At this point, the default stance should probably be:  
"Bearish unless/until we see an impulsive rally."

Let's look at the near-term SPX chart first:

On the long-term chart, I've sketched-in the potential I discussed back on 8/27, to help readers visualize it a little better:

Worth noting that on Friday's close, I observed in our private forum that:

This whole "afternoon" (NYC time) looked like a complex flat to me. I think a gap down is entirely possible on Monday. If we don't get one, the open might be a gift to bears, as the low looks like another b-wave.

As of the time of this writing (about ~5 hours before the cash open), futures are down more than they've been in a while, so it looks like Friday afternoon was indeed a complex flat.

So, in conclusion:

1. The market hit the upside fifth wave target zone from June 7 (4480-4550).
2. It then hung around for a minute and reversed.
3. It's now dropping out of a pattern that has the appearance of an ending diagonal.
4. Ending diagonals are terminal patterns.
5. On July 31, I published a piece titled Why the Fed Will Be Powerless During the Coming Supercycle Crash, in which I opined that to bring things crashing down "all it will take is a catalyst."
6. The potential Evergrande contagion may be the catalyst.
7. It's certainly interesting that Evergrande has shown up right at a major inflection point.
8. Caveat:  Again, it is too early to say with complete certainty if this is THE end of the 12 year bull... but... all the conditions have been met so far.

Trade safe.

SPX, NYA, TLT

Last update concluded:

...the question at the moment seems to be whether bulls will manage a near-term bounce, perhaps back up to retest the black trend line on NYA (dragging SPX with it, perhaps also to test its black trend line).  Other than that, it's hard to find a lasting bottom pattern here, so lower prices do still ultimately appear reasonable to expect.

Below is NYA's chart since:

SPX also rallied up to its black line, then even managed to tag its red line for good measure:

Both markets then reversed pretty hard and tested their recent lows, before bouncing back up toward the aforementioned highs, where we currently find ourselves.  

Which brings us to the "bonus" TLT chart:

In conclusion, both SPX and NYA have completed minimum retests of broken support and could thus head directly lower if they want -- but do remain aware that it's not uncommon for markets to do a couple trips where the zone from the bounce is revisited (even slightly broken) and then the broken support zone is revisited.  In Elliott Wave, this often takes the form of a complex flat -- and they are generally pretty unpredictable.  I'm not trying to "predict" one here, just noting it's always possible.  Other than that, no real change to the past few updates.  Trade safe.

SPX and NYA Updates

Last update expected further downside "after the current bounce completes" and that came to pass.  There's actually little to add since last update, except to note that SPX has now reached the next red horizontal, which is potential support:

NYA is still above its next (apparent) key zone.  There are still a few tricks bulls could pull if that zone breaks, but it would be one more thing that lowers their odds:

In conclusions, the question at the moment seems to be whether bulls will manage a near-term bounce, perhaps back up to retest the black trend line on NYA (dragging SPX with it, perhaps also to test its black trend line).  Other than that, it's hard to find a lasting bottom pattern here, so lower prices do still ultimately appear reasonable to expect.  Trade safe.

SPX and NYA Updates

Last update noted:

Below yesterday's low would suggest a trip to the 4472-80 zone at the minimum, and a minor (near-term) waterfall at the maximum, potentially rather quickly down to 4445-56.

SPX dropped down to that first target zone early, then bounced... then later in the session moved "rather quickly down" to... 4457.  So it missed the second target zone by 1 point (though it's interesting to note that futures did capture the equivalent of 4456 in the overnight session last night and then bounced).

This is getting into interesting territory now, and I've outlined some zones on the charts:

NYA is just below the previously-noted black trend line, and will likely bounce to open the session, so we'll see if bulls can do anything with that bounce, or if it ultimately fails (I'm currently leaning toward the latter).

In conclusion, SPX effectively captured its next target zones, but bulls have work to do to right the ship, as presently it appears that further downside is reasonable to assume, after the current bounce completes.  Trade safe.