There Is a Slightly Increased Risk of Total Market Failure

I adopted a bullish bias early this year once I acknowledged that we could be embarking on a very long-term uptrend. That decision has served me well. That said, I remain open to a market top forming, though I rarely discuss it because of the relative absence of evidence for its arrival (i.e., we just keep on going up). However, the market is expensive and it won’t remain that way forever.

Now, what I’ve been expecting is a low to be put in place here from which we would rally well into next year. Now, that low may have been put in already (the bull count) or it may need another challenge of those lows (the bear count). Be that as it may, be cognizant of these two points:

1. If something big (like “primary 4”) was put in place already, we only need one condition to be met for a high of great significance to be complete: we need only a new high above the early September high and we have that.

In other words, I have been looking for either a two (or even a 4) of intermediate (orange) degree here, like this:

ES

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Weekend Recap: A Look at the US Indices, Yields, and the $VIX

I wish I had a novel insight to provide for you this weekend, but I haven’t much to add. My basic thought on $ES remains intact: I don’t believe this move is finished, and it is a bit of an open question as to just how high it might go and how long it might take from here before a retracement. It might drift in an upward trajectory for a while (noted here) but a case can also be made for it go significantly higher, too (noted here).

And though I have some confidence that $ES hasn’t finished rallying, I have less clarity regarding the other indices. In this last post on the indices, I gave upward targets, and they have all been met, or exceeded, so I don’t have much to say for the moment that is decisive. But regardless, I’ll walk through them each in turn here just to have some assessment of them together all in one place again.

1. My primary assumption for $ES for the moment is that it will tend up and to the right, finishing a series of fours and fives to complete a first aggregate impulse wave. I will do my best to try to identify those fours and fives if they do, in fact, materialize. Of interesting note is that if we do get the arc, it may also give us the appearance of a double top as it crests, so we can anticipate, even now, how the bear argument may not immediately fade from view.

ES

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