Wednesday, March 16, 2022

SPX Update: Fed Day

The market continues to move around within its recently established trading range, which has kept open both options we've previously discussed.  I've added some additional details to the familiar chart below:

Today is a Fed day, so the market is hoping the Fed comes out and says something akin to, "In light of recent geopolitical tensions and blah blah blah, we've decided to only raise rates by one millionth of a basis point to help fight inflation.  Ha ha ha.  Party on, dudes!"  And I suppose anything is possible with these [note: remember to insert more polite synonym for "clowns" here before publication!]

I should also add that, given the complex nature of the ES/SPX lows, there is at least an option for a drop back to the Feb. lows, followed by a rally back up toward 4300, followed by the "real" drop.  Just something to be aware of.

In conclusion, beyond that note, still no change to the recent chart picture, but I have included some additional zones of interest.  Trade safe.

Monday, March 14, 2022

SPX, INDU, NYA: Answers We May Not Want, to Questions We Haven't Asked

The market has remained stalled for the past couple sessions, seemingly waiting on the Fed this week.  Though what it expects the Fed to do at this point is unclear, old habits die hard.

Accordingly, near term options remain on the table as recently discussed.  Bulls are hoping for a C-wave relief rally, while bears are probably hoping for the same.  

Since everyone is probably hoping for the same outcome here, we should not ignore the possibility that it may not materialize.  On the chart above, it shows wave "5?" -- but be aware that said wave would probably be wave 5 of a larger wave 3, and that sometimes means an extended fifth wave.  As the chart below shows, any sustained breakdowns should be taken very seriously:

Bigger picture, the bear case hasn't changed, though I have included some ballpark numbers on the chart below.  The question I always ask myself in parallel with such numbers is, "What would have to happen to take SPX to [for example] 2200?  What is going on in the world as the market falls?"  Because we have to remember, especially when dealing with Supercycles, that these things do not occur in a vacuum.  If the market crashes, there are things going on outside the market that will be "causing" the crash.

And when it comes to Supercycles, those events can be truly dramatic, as I've often discussed in the forum.  During a Supercycle crash, the door is open to events such as major natural disasters ("big one" earthquakes, Cascasdia Subduction Zone tsunamis, etc.), world wars (or even something at a smaller scale but still massively devastating, such as a "backpack nuke" brought up through our less-than-secure borders and detonated downtown in a major US city), comet impacts -- things of that nature.  Things that we tend to blindly assume can't happen in modern times, but most assuredly still do.

Those types of events can, and usually do, run in close proximity to Supercycle crashes.

Anyway, I don't mean to sound melodramatic, but when we start asking ourselves the question ("What could be happening in the world to cause the market to react so negatively?"), we probably won't like the possible answers.  As I've always said:  Charts lead the news.

And finally, a chart that still contains at least a sliver of hope for the bulls:

In conclusion, bulls and bears are still hoping for a C-wave bounce off the low here, and there's still a reasonable chance we'll get one.  But if we don't, then be very cautious if the market sustains breakdowns at the noted levels.  In the meantime, we'll see if the market keeps waiting until the Fed does its thing.  Trade safe.

Friday, March 11, 2022

SPX Update

The near term continues to be less than ideal for traders, with SPX stubbornly refusing to resolve itself.  Both recently discussed near-term options thus remain on the table, with bulls still keeping hope alive for at least a relief rally:

Investor sentiment has reached extremes in terms of the recent bull market, and maybe that will help generate a bounce -- but keep in mind that if the market has become a bear, then (whether this indicator works here or not), indicators that worked during the ~13 year bull market will begin to fail, and will eventually fail spectacularly.

In conclusion, bulls have kept hope alive for at least a near-term relief rally, but no resolution so far, so bears aren't out of the near-term game just yet (bigger picture, they will remain very much in the game, even if SPX rallies up toward 4717).  Trade safe.

Wednesday, March 9, 2022

Brief SPX Update

Last update noted:

I suspect we may finally get some near-term resolution in the next couple of sessions -- the market just has that feel to it right now.

And the market obliged, but the potential counts remain the same for now, so still not much to add:

 Other than that, still not much to add.  Trade safe.

Monday, March 7, 2022

SPX Update

SPX continued its range-bound tendencies for the entire week last week, leaving the near-term cloudy with a chance of rampant inflation (99% chance, so buy extra umbrellas while they're still affordable).  Accordingly, I've attempted to draw up the most "straightforward" (meaning: the market always reserves the right to morph into something more complex) of the near-term bull and bear options:

No change to the big picture:

In conclusion, I suspect we may finally get some near-term resolution in the next couple of sessions -- the market just has that feel to it right now.  The two most apparent options are shown on the first chart -- but again, the market can turn into a more complex structure if it wants, so best to stay nimble.  Trade safe.

Friday, March 4, 2022

SPX Update

The market has remained range-bound since Monday, meaning there's still not much to add to Monday's extensive update.

Once again, I was unable to update the COMPQ chart without Stockcharts deleting all my prior annotations; it appears their commitment to the New Cruelty policy will continue until [date redacted], so just SPX today:

In conclusion, range-bound market this week, so not much to add since Monday.  Trade safe.

Wednesday, March 2, 2022

SPX Update: Part of the New Cruelty

Not much has changed since Monday's extended update, except to note that COMPQ did overlap its first key level.  I'd publish an updated COMPQ chart, but every time I touch that chart, Stockcharts deletes all my old annotations and makes me start from scratch, and it's just not worth the effort sometimes.  Refer back to last update if you missed the chart (COMPQ near-term).

Instead, we'll look at SPX, which has not touched its key overlap yet:

In conclusion, beyond that, not much to add to Monday's extensive update.  Trade safe.