Market Paused In An Uptrend

Current Position of the Market - Sunday, March 21

  • SPX Long-term trend: There is some evidence that we are still in the bull market that started in 2009. This market trend could continue into the first half of 2021 before major cycles take over and it comes to an end.
  • SPX Intermediate trend: SPX may have completed a phase of its intermediate uptrend and it may be consolidating.
  • Cycles: Looking ahead.
  • 90-year cycle -- Last lows: 1843-1933. Next low: ~2023.
  • 40-year cycle -- Last lows: 1942-1982. Next low: ~2022.
  • Seven-year cycle -- Last lows: 2009-2016. Next low: ~2023.

Market Analysis - TLT Weekly Chart

In my previous article, I showed a weekly chart of TLT which had been declining since July of last year in a steepening downside curve, which is worrying some analysts that this could mark the beginning of an inflationary trend. The chart below is adjusted to show last week’s action in TLT. It dipped a little lower than its November 2019 support and closed right on it. Last week’s close also puts it slightly below its 200-week MA.

The Federal Reserve pushed interest rates to an abnormally low level in March 2020, and this could be a simple adjustment to a more normal level for now. A continued, protracted price decline toward the lower trend line that goes back to 2011 would be a concern, especially if the trend line were broken.  

The CCI is beginning to flatten, but it does not yet show clear positive divergence, suggesting that the near-term low in TLT is probably still ahead of us. 

NDX - DJIA Weekly Charts

Last week, I also mentioned that the rise in interest rates is helping to lift financial shares and weighs heavily on technology stocks. You can see this in the charts below which compare the recent performance of NDX to DJIA/DJI.

These charts also suggest that we need not (yet) worry about having made a bull market high. Even NDX, despite its recent weakness, remains in an uptrend -- although this could change over the next few weeks as pressure from rising rates becomes more intense.

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Charts are courtesy of QCharts.

The above comments, as well as those made in the daily updates and the Market Summary about the financial markets, are based purely on what I consider to ...

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