SPX and INDU Updates: Just the Short Term, Ma'am

By Jason Haver  DEC 07, 2012 8:30 AM

Today's update focuses on the short-term charts.

 


MINYANVILLE ORIGINAL Last update noted that the rally might be due a breather, but the price action since has been inconclusive.  I get bugged when I can't reconcile the charts at the 5-minute time frames and below, and that's the case right now.  The 5-minute S&P 500 (INDEXSP:.INX) chart makes sense in two contexts, but the contexts are diametrically opposed from each other.  Basically, either my last read was correct and the market is forming some kind of screwy expanded flat 2/b (blue), or it's just completed the first wave of a new leg up.  The expanded flat makes more sense in the context of the price action that came before, but it just doesn't quite jive with the move since 1415.
 
I pretty much despise nights like this, because I've now spent roughly seven hours charting, but feel like I have little to show for it.  The chart below discusses a few levels to watch, and some potential targets, but I'm hesitant to get too married to anything here.  Stay nimble if you try to trade this mess.

For more context on the bigger picture, please see Wednesday’s update.
 

Click to enlarge
 
Next is the Dow Jones Industrial Average (INDEXDJX:.DJI) chart, which performed well per the last update and came within a few thousands of a percent of reaching the first target -- but the wave seems to have become more complex.  The interpretation below jives reasonably well with the blue SPX count above -- so maybe my sense of frustration is misplaced... it's always possible I've got this reconciled perfectly and the market will perform exactly according to plan.  As I said, though, stay nimble here.
 

Click to enlarge
 
In conclusion, last update I warned about the possibility of a confusing and frustrating trading range forming, and that may well be what's going on.  A clear break of the range (especially on INDU) should help lead the market into more clarity.  Trade safe.
 
No positions in stocks mentioned.

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