$SPX Update

Looking again at the two most obvious outcomes discussed yesterday (here), the bullish case had us in a potential leading diagonal, and if that was the case, I would have liked to have seen an obvious “2,” which required another drop, which we didn’t get:


It just doesn’t look a 1-2 right now. Anything is possible, Bitcoin, JNK are both strong here, maybe the market is accepting risk. I dunno. What I want is to be able to count—from a low—something bullish, a 5-wave rally of some kind, and the leading diagonal was my only good option for that, and it doesn’t really look right.

The really obvious structure is this big triangle I’ve discussed before, first as it appeared on futures, but it’s now obvious on the cash session, too.

And it’s so big that if plays out as a big bear wedge, I doubt it’s a 4th wave and would think it would be a B-Wave in itself. If that happens, I would count it like this:


I still think this is very obvious, and I think maybe too many people expect this to fail, but that doesn’t mean they’re wrong. What I don’t have is a good way to count this bullishly, and what I do have is this triangle.

So, we’ll have to see. Because of the risk of this breaking down, as I discussed in the Discord this morning, I closed my futures long at a profit early in the session, closed my longer-term SPY calls, but have kept my shorter-duration SPY strangle. This probably means we’re finally going to go shooting straight up lol.

But, 19 days, effectively sideways. Good lord. It all comes down to where we put the top in. Was it on the 1st of December or the 13th? I liked it on the first because it gave us a plausible expanded flat correction that I thought few would see, even with a little stealthy bull flag, but this is just taking forever to rally, and I’ve lost some confidence in that. So, if the top was the 13th of December, we need a 3-wave decline, and the drop post FOMC could have been the first (Green A), this stupidly boring consolidation the second (Green B), and maybe we need another drop to wrap things up (Green C).

It looks too obvious to me, but I can’t see a good way to count this bullishly from here at present. Doesn’t mean we’re not going to rally, it’s just I don’t have a good way to prove it.

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