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Updates to the Long-Term Market Outlooks

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Both the bull and bear potentials currently remain viable. Here are some signs to watch.

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Moving on to the more near-term, on Friday the S&P 500 (INDEXSP:.INX) cleared the 1550 level, and has thus declared that it is more likely to be in the midst of forming a five-wave impulsive move to the upside. As I noted on Thursday, there is no "true" invalidation level for the proposed expanded flat, so it remains an outside possibility -- but odds are against that pattern now, so it has lost the weight required to continue justifying its own separate chart, and is instead merely noted with the black "alt: (a)/(b)/(c)" labels on the chart below. The market may be in the throes of a smaller degree fourth wave consolidation (not labeled), so may move sideways a bit before wrapping up red 3. Do please note the caveat on the chart annotation.


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Finally, a quick update to the near-term trend line chart.


Click to enlarge

In conclusion, there's an old Chinese proverb that translates: "May you live in interesting times." These are interesting times indeed, and for the moment, the long-term bull and bear potentials both remain viable. Over the near-term, it does appear more probable that the market will do a bit of backing and filling before advancing again into the wave 5 target zone. Sustained trade below 1525 would now be the first clue that something more bearish was unfolding. Trade safe.

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No positions in stocks mentioned.
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