Phase Two Projection Reached

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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) 

IWM vs SPX (weekly)

For the first time in several months, IWM is showing some significant relative weakness to SPX. In the past, this has been a warning that the latter was about to correct. Since this warning is also duplicated in the daily oscillators -- and since SPX is deemed to have reached an interim price projection -- an imminent reversal should be expected.

SPX daily chart

There are multiple warning signs that the uptrend which started from 3853 (which represents the second phase of the uptrend from 3723) is coming to an end.  To make these as clear as possible, they are listed below:

1 – To begin with, the P&F congestion formed at the 3950 level gave us a count of 4180-4200. On Friday, SPX reached 4191 in what appeared to be a final, little climactic move in the last minutes of trading before pulling back and closing at 4185.

2 – From 3723, SPX has created a channel the top of which corresponds to the price achieved by the index on Friday.There is a larger channel which originates at the start of the intermediate channel from late October 2020. An internal trend line drawn as a parallel to that larger channel across the 2/16 top intersects with the smaller channel’s top line from 3723. The two combined should provide strong resistance to any further advance.

3 – The CCI is showing a clear negative divergence pattern, and the SRSI appears to be on the brink of a reversal.  

4 – IWM is showing relative weakness to SPX -- a pattern which normally takes place just before a reversal in SPX.

The above listed conditions provide an irrefutable warning that SPX has come to the end of the move which started from 3853.

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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 be sound technical analysis principles. ...

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