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SPX, BKX, NYA: Time for a Little Caution, Though No Reason to Get Too Bearish Yet


Fractured markets suggest a correction, but it's too early to say how deep.


There are no meaningful signs of a turn yet, but both NYA and the Philadelphia Bank Index (BKX) are sporting the potential of complete rallies. The challenge on NYA, though, is the same structure discussed in SPX is entirely possible, and the wave labeled as "v?" may only be wave (1) of v. There's simply no way to tell this early, but I would be remiss not to give this warning.

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And then there's BKX, which has not completed an impulse wave up off the low yet. Normally, we'd expect an impulse wave in this position, but the potential of a diagonal means that an ABC would fit as well. Because of all the fracturing and weird patterns, equities are exceptionally difficult to get a handle on at the moment. If you've survived this market for the past year-plus, pat yourself on the back.

Again, given what's in the charts presently, there's no reason to expect anything other than a continued bullish resolution -- but I do feel I would be remiss not to mention the warnings.

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In conclusion, the bulls have had smooth sailing all year, and the updates have noted that was likely up to this point. While there's no reason to "expect" a big correction yet, there are finally some early warning signs that point to caution. Trade safe.

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