So here we are. SPX is lurking just below the 2600 area (target extends from 2600 up to 2650 or so) and things sure do seem different than they did leading into the Christmas Eve massacre. That is the nature of a counter-trend bounce. It’s job is to re-embolden the bulls and put doubt into the bears.
What I am going to do is go robotic on you again and simply state that the market has only done (so far) what we expected it do do. In fact, the Christmas Eve low came well after I’d started expecting a holiday bounce. You probably recall that.
The weekly chart would have us believe that there is unfinished business on the downside. That business is the 2100 to 2200 target, which is major support. But first a test of the upside.
The chart reminds us that the market broke down from some significant negative divergence by MACD, RSI and other momentum indicators. It became oversold and needed a bounce.
But as someone with a stated target (2100-2200) hanging out there I am probably more sensitive than the average market participant about the near-term view because like most humans, I want to be proven right in my views. So, I want to be clear about two things…
Thing 1: The market is as of this morning going 100% to plan and…
Thing 2: There is no way to know whether that plan – established on technical probabilities – will play out.
If it does not play out I am going to state clearly that I was wrong to focus on 2100-2200 as the sentiment-driven Christmas Eve plunge would have been the bottom.
So the bottom line is simply that we are 100% on track to having the ongoing analysis proven out. But we are also nearing a point where the analysis can be invalidated. I am not one of those
carnival barkers market callers seeking to make predictions. NFTRH as a service defines probabilities and if needed, revises them based on incoming information. I am most definitely not smarter than the next guy. I am just more willing to put my ego in a box and adjust.
Now the rest is up to the market. See you on Sunday with NFTRH 534.