The market started off the week on a down note which continued into Thursday, however the market made an impressive recovery rally on Thursday with the major indexes and most sectors forming large hammer long legged doji type patterns. The market followed through on Thursday's key reversal patterns with a solid rally on Friday, thus creating bullish morning start patterns.  My only negative about Friday's rally was that the volume on the major indexes as just average.  For the week the market ended mixed with the SPX/Down losing 0.2% for the week, while the Nasdaq/NDX gained 1.5% and the Russell Small caps gaining 0.6%.  

The market is currently in earnings season and for the most part earnings have been very solid, however the market has been chopping around in a large triangle type pattern that has been fleshing out since the Feb correction.  AAPL definitely helped the market on Friday with a huge breakout on the 'Warren Buffet' news, however the AAPL system has been long for about 2 weeks and that trade is up almost 13%, I'm happy to hear that some of you took that trade! As you know we currently have two systems on the website, the SPY Pro and AAPL, however I may try to expand on this to a basket of large cap stocks possible 10 - 20 stocks! Realize that is quite an undertaking and will take me a while to develop, however I would probably give it as an add on product to BPT membership.

Anyway back to the market:  Again the market has been chopping around since Feb into large triangle patterns.  There are three main potential scenarios that we are following: An ABCDE triangle pattern, or an ABXABC more complex type correction, or an ending diagonal pattern.  It's possible that under a bullish case the market put in a wave E low last Thursday with those large doji candlesticks, however it's too early to tell.  Or another possibility is that the SPX could push higher to form a more symmetrical triangle and compete wave D as yet another lower high then pullback for E. Again it's possible that wave E low is in but too early to say yet.  How will you be able to tell?  Follow price action, if the wave E low is in place, then the market should rally impulsively higher!  If however the market continues to be choppy then that supports the triangle patterns not being complete yet.  If one is long the SPX I suggest having a stop in place at Thursday's low and taking some profits just in case, remember you can always add your full position back later once things are clearer, even at higher prices. 

Basically we still view this whole correction since the Jan highs as some sort of large 4th wave triangle pattern with yet one more new high or truncated high coming later this year. The choppiness of the market suggests that, generally choppiness is bullish. That said one must realize we are 9 plus years into a bull market, thus we are not expecting any repeats of 2017 type strong trend moves up, as a final move up to new highs could be the last bit, but again we'll take it one day at a time.

$SPX - Chart Link

$SPX - Chart Link

$SPX - Chart Link

$SPX - Chart Link