SPX and COMPQ: The Good, the Bad, the Ugly

Last update noted that we were on track for the speculated c-wave, and since then, COMPQ managed to capture its c-wave target, but SPX instead chose to bounce strongly from the lower trend line on the near-term chart.  We'll look at COMPQ first, then move to SPX, where the discussion becomes more detailed:

SPX found support at a trend line that I noted in real-time on the forum:

This SPX bounce opens up some questions/options here from a technical perspective, as follows:

1. Wave C played out as a running flat in SPX, instead of the more common expanded flat.
2. The low is a micro b-wave, which could run toward SPX 4742-60 in a micro c-wave, before reversing back to break Monday's low.
3. The entire larger structure is playing out as an ending diagonal (I mentioned this briefly last year), with the ATH being wave i (or possibly even wave iii) of said diagonal, and the recent drop being wave ii/iv.
4. SPX is forming a crazy bull nest to launch wave 5 into a large extension.

Of those, the last one "seems" the least reasonable, from a purely rational perspective -- but I suppose we've seen less reasonable things out of this market.

I think if I had to pick one, I'd probably lean very, very SLIGHTLY toward option 2, as of this exact moment.  But that's largely because it seems like the most sensical of the above options -- not because it's particularly clear on the chart.

In conclusion, COMPQ was a hit, but SPX has decided to muddy the water a bit, so we'll see how SPX handles the 42-60 zone first, then take it from there.  Trade safe.

SPX and COMPQ: Still on Target So Far

Since last update, SPX made another new low, adding even more weight to the preferred count.

I didn't update the SPX chart annotation because Stockcharts is back to doing that annoying thing where if I try to update the chart, it deletes ALL my prior annotations:

And I didn't update the COMPQ chart, because there's nothing to update:

In conclusion, "so far, so good" remains the order of the day, and the market so far remains on-pace to play out the preferred count.  Trade safe.

SPX Update: So Far, So Good

For the entirety of 2022 (ha ha), I've noted that I liked the idea of a B-wave high that would lead to a sharp drop in wave C, and so far the market is doing its best to oblige.

Last update's COMPQ chart proved timely:

And the oft-discussed very-long-term (VLT) trend line has held so far:

In conclusion, bears have done what was expected to keep the idea of a C-wave decline at the forefront.  It's worth noting (as I mention on the first chart) that so far the decline from the ATH is only three waves, so we can't entirely rule out things such as an ending diagonal just yet, and that makes yesterday's low a bit of an inflection point -- but if bears can sustain a breakdown there, then that will keep the C-wave on the front burner.  Trade safe.

SPX Update: QE is Fun... for a Season

The market is still in basically the same place it was in the last update -- and last update discussed the following:

As I noted on the chart, I somewhat like the idea of a complex flat (red b/c), but there's just no way to "predict" that at this stage.  If the market instead wants to keep running higher in wave iii of blue bull 5, it certainly can do that.

So no real change there, but I have added a bit to the chart:

I also thought there might be value in sharing the chart that caught my eye prior to last update -- the chart that led me to "like the idea" of a complex b-wave/c-wave (below):

Big picture, SPX is still right up against the upper boundary of the very long-term trend channel:

On another note, it's crazy to consider that SPX is now up seven-fold from the 2009 lows, and triple what it was at the 2007 high.  Is the economy three times as strong as it was in 2007?  Of course it isn't.  But $7 trillion in QE buys a lot of feel-good, I suppose.  At least for a while.  Kinda reminds me of something my father liked to quote:  

"Sin is fun for a season."  

In other words: Short-term fun, long-term mess.  The problems always come later, when we have to stare down the consequences.

Beyond that, no material change since last update.  Trade safe.

SPX Update: 2022

So it's now 2022, which means that on January 22 at 10:22:22 p.m., it will be the twenty-second second of the twenty-second minute of the twenty-second hour of the twenty-second day of the twenty-second year of the two-thousands.  

Or something like that.  

Anyway, I hope everyone brought in the New Year safely.

Last update discussed a few possibilities, quote:

1. A complex b-wave high (slight new high, then back below the blue "bull: 4" label, then back above the ATH). 
2. A subdividing fifth wave (leading to a solid rally) 
3. An ending diagonal (with the current rally being iii of said diagonal)

Thanks to Jerome Powell and his magic beans, all three of those options remain on the table.  Let's look at the first two in a bit more detail on the chart below:

As I noted on the chart, I somewhat like the idea of a complex flat (red b/c), but there's just no way to "predict" that at this stage.  If the market instead wants to keep running higher in wave iii of blue bull 5, it certainly can do that.

Of course, in order to do that, it's going to need to stage a breakout over the long-term black line below:

In conclusion, after much ado about nothing, "bull: 4" held up and led to new all-time highs.  From here the market could continue to make things even more complex with another b-wave high, but certainly isn't required to.  Trade safe, and I wish everyone a healthy and prosperous New Year!

SPX Update

The toughest trading areas are always those near potential turns, and the market is not disappointing anyone in that regard right now.  On the plus side, we can rule out the micro fourth option... but more cans of worms have been opened, at least until the trading range resolves.

We'll start with the updated short-term chart, then discuss things in more detail:

So the chart only covers "bear: i/a" and the "bull: 5" options in broad strokes, but were the market to continue directly to new all-time highs, THEN (and only then), the following additional options might apply:

1. A complex b-wave high (slight new high, then back below the blue "bull: 4" label, then back above the ATH).
2. A subdividing fifth wave (leading to a solid rally)
3. An ending diagonal (with the current rally being iii of said diagonal)

I'll cover those options in more detail if it becomes appropriate.

Another near-term option is outlined on the chart below:

In conclusion, the trading range, combined with the ambiguous nature of the pattern, is making the market's near-term intentions a bit foggy, but there isn't much to be done about that other than to await more clarity.

Also, since this is the last update before Christmas, it's tradition to post the link to A Christmas Story --  Reflections on What Matters.  Trade safe, have a great holiday, and Merry Christmas!

SPX and COMPQ Updates

Last update concluded:

[W]hile I've been leaning toward a fifth of bull: 5, we now have enough structure in place that we have to more seriously consider the possibility that it completed as a failed fifth. We'll see how the market reacts to the zone near and/or a bit south of 4600 (assuming we get there), and if it can't find support, then we'll take it from there.

And on Friday, SPX hit 4600 almost on the nose, and bounced hard.  Today, it's going to drop through that zone right at the open.  Bulls will need to sustain trade back above 4600 to give themselves a shot at the complex iv discussed in Friday's update (which brings us to the typo that was on Friday's short-term chart):

As noted on the chart, there is also always the possibility of a complex 4 instead of the complex iv that was discussed.  4 is one degree higher than iv, so a complex 4 could technically revisit the zone south of 4500 -- but that zone would be too deep a retrace for iv.

Anyway, no clear answers yet as to whether ALL OF 5 completed, or whether it's still subdividing.  I hold to my view that the top is closer than the bottom (long-term), unless there's a breakout at the very long-term trend line I've mentioned repeatedly over the past few weeks.  That trend line will remain as the first litmus test where I might question my current thesis:

Speaking of long-term trend lines, COMPQ has a line below the market that may become relevant again very soon:

And finally, SPX has the median line discussed last update, which is even closer than the VLT line, and is still keeping a lid on things for now:

In conclusion, the chart picture could change if there are multiple breakouts, but unless and until that happens, there's not much for bulls to get excited about.

Also wanted to mention in advance that I will probably not do an update for Christmas Eve, because it's, you know, Christmas Eve.  I traditionally also take the week off between Christmas and New Year's Day (well, about half the time I do, anyway), so Wednesday's update will probably be the final update until the New Year.  Trade safe.