An Encroaching Cycle

Current Position of the Market

SPX: Long-term trend – We are in an official bear market.

Intermediate trend Concluding initial rally in a downtrend.

Analysis of the short-term trend is done daily with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.  

Important Cycles 

A 52-day cycle making its low on May 14 interjected itself before the next 80-day Hurst (45-td) cycle low due June 8. This had the effect of altering the short-term price structure.  

Point & Figure Overview of SPX

Intermediate trend: I should have stayed with my previous 2970 projection. A new distribution pattern is now in progress between 2940-2980.   

Market Analysis & SPX-IWM weekly charts  

The new cycle had enough strength to take the SPX slightly beyond its high of three weeks ago. This altered the P-F pattern and caused the distribution phase to take place at a higher level, thereby modifying the short-term price analysis and nullifying the previous downside projection. Next week should determine if the high of the 80-day cycle has been reached. The 50-week MA is a short distance higher and should act as resistance if the index challenges that level. 

IWM failed to make a new high and remains a laggard.

Charts courtesy of QChart)

SPX daily chart 

The 52-calendar day cycle (36-td) was unexpected and has altered the price structure, causing the index to reach a slightly new high instead of starting the 80-day decline from a lower level. Friday, May 22’s price action suggests that we may not be finished with the short-term topping formation, which is underway. If there is a new high ahead, it should be restricted by the 200-dma, which roughly corresponds to the 50-week MA, and currently runs at about 3000.  

With the 80-day cycle low rapidly approaching, we should be very close to beginning a decline into its due date during the first week of June, but with IWM slightly stronger over the near-term (while weaker at the weekly level), it is not inconceivable that both indices could make a new high next week before rolling over.  

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Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of ...

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Chee Hin Teh 1 month ago Member's comment

Many thanks for information. James