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SPX, INDU, NDX, NYA Updates: Bears on the Run


The bulls have reclaimed the key 1453 level on a closing basis, which means the odds are good that an important cyclical low is in at 1425.


On the S&P 500 (INDEXSP:.INX), while my short-term outlook stayed bearish until 1425, my preferred intermediate outlook has remained bullish for some time. The question that now needs to be asked is whether it was "bullish enough" -- the next swing high may mark ALL OF wave (5), or only wave (i) of (5), with (ii)-down, (iii)-up, (iv)-down, and (v)-up still to come.

Of course, I'm getting way ahead of the game here, and the first step, of course, is for those new swing highs to occur... but it looks increasingly probable that the projected turn at 1425 was a meaningful one. Obviously, closes back beneath that level would create problems for the bull case.

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A look at the 5-minute SPX chart suggests that there's still room to run over the short-term, though it's a bit unclear if the entire blue wave (4) is complete or not, which could lead to a small downward correction first. The alternate count considers that the final wave up ("or (5)?") may have completed in its entirety, which would suggest a larger correction toward the 1439-1450 level before the rally resumes.

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No positions in stocks mentioned.
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