Minor Correction Due

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SPX Long-term trend:  There is some evidence that we are still in the bull market which started in 2009 and which could continue into the first half of 2021 before major cycles take over and it comes to an end. 

SPX Intermediate trend:  SPX is in the next phase of its intermediate uptrend.

Cycles:  Looking ahead 

90-yr cycle – Last lows: 1843-1933. Next low: ~2023 

40-yr cycle -- Last lows: 1942 -1982. Next low: ~2022 

7-yr cycle – Last lows: 2009-2016.  Next low: ~2023

Market Analysis (Charts, courtesy of QCharts) 

SPX vs. IWM (weekly)

IWM has a dependable history of topping ahead of the SPX. This is taking place again today with IWM peaking on 3/15 and correcting ever since.  It may only be alerting us to an intermediate top in SPX which could bring about a two/three-week correction before it undertakes another phase toward a more important top.  

SPX daily chart

On Friday, SPX reached the top of the channels that I had drawn on the chart the week before: a small dark-blue channel from 3723, and the orange intermediate channel, the top line of which started from 3646. These were expected to create some resistance for the move from 3853 which had a partial projection target of about 4100. But Friday’s action indicated that 4130-35 could be reached before a minor consolidation takes place and is followed by a move to about 4180 to complete the current phase. After a 2- to 3-week correction, we could then start on the final bullish trend from 3723 to about 4350, from which a larger correction would be expected.  

In the comments that I made above about IWM, I suggested that the latter was warning of an SPX top. That would probably be the end of the move expected to come around 4180-4200.  That warning is also appearing in the daily CCI (below) in the form of negative divergence.

SPX hourly chart 

On the hourly chart, I have added one more short-term channel to define the second phase which is progressing within the dark-blue channel from 3853. It shows that the move could extend beyond the outside of the larger blue and orange channels -- perhaps even before the current phase is complete. But the resistance encountered at Friday’s close (which corresponds to ~4130 on the P&F chart) suggests that a near-term pullback should occur before we end the second phase around 4180-4200.  

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Disclosure: 

Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer ...

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