Here are a few different charts we have used in NFTRH in order to keep a view of the US Stock Market’s big picture in mind even as we managed the shorter-term picture, which culminated in the daily SPX breaking down out of the nose of the 50 and 200 day moving averages per the chart in this post.

Click for a monster sized view.  The point I was trying to make even last year as the MACD rolled over, was that the market was coming due for a correction and that while the MACD looked like a bull ender, similar conditions in 1998 and 2006 were not.  They were bull refreshers as momentum refueled for the ultimate drive to the top.  The EMA 20 (green) was seen as the bounds of a ‘normal’ correction and as of now, in-month, SPX is well below that MA.

Another message of the chart is that SPX can correct all the way back to 1550 and SPX would be in a cyclical bear within its big bull market breakout.

I created this chart after reading some cycle work by Peter Eliades, by way of one of Robert Prechter’s EW Theorists.  This further defined the time window for the correction.  Boink, good job Peter.

This chart shows the ‘higher low’ that SPX needs to make to avoiding doing what some other indexes have done in making lower lows to October.  Generally, SPX and other US markets need to not close August below that level or a cyclical bear is likely.

People talk about how the US market has not yet accelerated upward and indeed, there is a chance that the manic up phase is still out ahead after this fright fest cleans the market’s pipes.  But the slope of the post-2012 bull phase looks similar enough to the post-1998 bull phase.  There is no implicit need for further acceleration to end the bull.

It is really interesting though that China/Asia are being blamed for everything right now.  The similarity to the late 90’s ‘Asian Contagion’ is clear.  That thing ended up being an accelerant to mania.  What will this thing end up being?  If SPX does not get back above the EMA 20 soon it will look different than the 2 previous downside whipsaws.