Touching the S&P 500 with a ten-foot pole, then thinking better of it

Nice movement in the equities markets in both directions today for daytraders. The bias compared to the ChartsEdge Market Map for today was showing somewhat more positive than the map forecast, which would be an early indicator that the end of day rally might be more bullish as it was. That still leaves us with the weekly cycle forecast and longer-term, bigger picture, which still isn't pretty at all. On the S&P 500 chart (below), you can see that, other than the spike rally at end of day dressing up volume a bit, the remaining indicators don't give any real basis to see it as different from a kissback-type pullback after searching for support on the drop.


The VIX chart (below) shows that VIX has now done hard tests of my trendlines both up recently, and then down this afternoon. I've also posted other charts at my UBTNB3 site including the ISEE (showing rather positive sentiment still, at 152 for All-Equities, which is still rather bearish) and CPCE (slightly up today, so some may be trying to pick a buying opportunity with that but good luck with that!). And also the McClellan Oscillator and Summation Index charts for NYSE and Nasdaq, which look to me consistent with like the equities markets trying their best to tread water testing support, hoping something good might happen.


The risk in the potential Elliott Wave pattern is that we've seen the initial move down recently of either a wave 5 or C-wave down, with this afternoon's rally being a pullback correction (or part of a pullback correction) that sets up the market for a steeper drop soon. If that's right, then either SPX 750 remains the focus, or there's still the potential of SPX testing under 741 for one of the support levels we examined some days ago (such as 640 or lower).

If you're bullish and trying to play the bounce based on SPX potentially getting support at today's lows, perhaps with the lower Bollinger Band since the BB's aren't (yet) confirming other than a sideways trading range, then you've got to be thinking of 804.30 as your support stop level ... and good luck to you because you've got more guts than I do for trying to be long this market! All I can see from my perspective, is remaining swing trade short and/or playing daytrades when opportunity presents.

There are so many people that have figured out the idea that the markets "should" do a limited bear market rally, perhaps to 1000 SPX or perhaps higher ... that it's begun to factor into my thinking, that such a scenario is likely the last thing the markets are likely to really do. But will see of course, as much as I'm the skeptic looking for 750 or below! As always, be careful out there and happy trading!