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SPX and NDX: Intermediate Signals Remain Mixed


Intermediate indicators remain split on equities, but here are a few things to watch.

First up is the bull chart:

Click to enlarge

And next is the bear chart, which indicates the potential of a complete ABC rally and, with it, a meaningful top.

Click to enlarge

In conclusion, the markets are still giving signals which run at cross-currents to each other, and the current wave counts are open to an unusually high degree of interpretation. This can easily lead to "seeing what you want to see." I try to avoid that trap whenever possible. Do note that, for the moment, both wave counts remain aligned in suggesting a continued correction lower over the short-term -- but the question I can't answer (yet) with the market in this position is "how deep?"

In the most unbiased opinion I can muster, the decline from 1474 still counts best as a correction, and the sharp Thanksgiving-week rally counts best as an impulse, which does suggest that the 1343 low may hold for a while. This leads me to want to give the bulls a slight intermediate edge -- however, my intermediate indicators (many not shown) remain completely split on whether this market is a buy or a sell, so I feel that to convey any high degree of confidence here would be grossly misleading. Until certain key markers are resolved, my bottom line feeling is that this market still needs to be taken one trading day at a time. Trade safe.

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No positions in stocks mentioned.
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