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SPX Update: A Dangerous Market for Bulls


If the preferred count's projections continue to track as well as they have for the past couple months, then at the moment, this is not a safe market for bulls.


London's FTSE 100 (INDEXFTSE:UKX) looks to be in bad shape:

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The "obvious" near-term wave count is as follows -- however, during third waves, the obvious wave count isn't always the actual count. Sometimes the wave you think is red 3 is actually another small first wave, and so on.

Click to enlarge

One chart that bothers me ever so slightly for the bears is the KBW Bank Index (INDEXDJX:BKX), which failed to make a new low yesterday. Keep an eye on this one.

Click to enlarge

In conclusion, I continue to feel that lower prices await. Long term, I think bulls still have the edge, but if this wave count plays out as expected, there may be problems lurking. We'll keep an eye on this heading forward. Trade safe.

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