Saturday, 12/26/15 update

Well, we got the obligatory Santa Claus rally last week in the ES/SPX, and if the market stays true to the history of recent years that rally will extend into the end of the year next Thursday.  BUT we ended the week quite "overbought", so maybe not.

There are a number of bull & bear alternate EW counts at this juncture, some of which are fairly complex and counter-intuitive.  I could post those, but I think the comparison presented a couple of weeks ago is more significant for the intermediate term (and maybe long term as well).

To state the obvious, to resolve this either the broad market as represented by the NYA will rally strongly to match the position of the SPX (blue chips) or the SPX will decline significantly to harmonize with the NYA.  Given that the Russell 2000, the Wilshire 5000 and (importantly) the Dow Jones Transport (as pointed out by Pretzel) are also showing weakness relative to the SPX, then it's quite likely that the bear  is going to take control of the SPX in the not to distant future.

Saturday, 12/19/15 update

Things are looking pretty grim here.  IF this count is correct, we have a series of two nested waves 1 & 2 down since the "c" wave failure of Dec7th with a 3rd of a 3rd wave underway.

Sunday, 12/13/15 update

From last weekend's post:
"In recent years the equity markets have been doing an excellent job of training folks to always "buy the dip".  That strategy was certainly successful this last week.  One of these days a whole lot of bulls are going to get trapped by that mentality."  

I made this comment because of concerns based on the following chart:

Note that since late October the S&P 500 (top chart) has been much stronger than the broader market as represented by the NYSE Composite (bottom chart).  This is a great big flashing yellow light on the highway to bull market bliss.  Can the ES/SPX shake off last weeks bear action and go on to new all time highs?  Sure it can, but if the broader market doesn't quickly follow suit then those new ATH's are liable to mark the last gasp before a significant change in long term trend.

If the ES/SPX doesn't turn back up soon, below are a couple of bear market possibilities.  Both of these alternates assume that Primary Wave IV of the bull market off the 2009 lows is still in progress.  Primary Wave II lasted 8 months, Primary W IV commenced last May, so a couple more months for the move would be in proportion:

Bear alternate #1 - multiple zig-zag 

 Bear alternate #2 - triangle

One final thought.  Imagine you are a portfolio manager or financial adviser.  It's Friday, Dec 11.  There are only 3 weeks left until the end of the year when results for the year are locked in and subsequently reported to and evaluated by clients and potential clients.  You have a very short time remaining to spiff things up, only 13 more trading days, and two of those days are holiday eves when there isn't a whole lot of market participation.  Meanwhile, interest rates are going up, commodities are crashing and the wheels are coming off the equity markets.  What are you going to do on Monday? 

Sunday, 12/6/15 update

In recent years the equity markets have been doing an excellent job of training folks to always "buy the dip".  That strategy was certainly successful this last week.  One of these days a whole lot of bulls are going to get trapped by that mentality.  But it appears we're destined for new all time highs before that occurs.

Current most likely count in the ES:

Short term 

Intermediate term

Long term