SPX Shows Potential For Reversal

Point & Figure Overview of SPX

Long-term trend: The bull market which started in 03/09 shows no sign of having run its course. A rough count taken on the long-term Point & Figure chart gives us a potential target to as high as 4080.P&F does not predict time, only price. (no change)

Intermediate trend: A more recent re-accumulation phase on the 3X10 chart projects 3330 to end this intermediate trend. Current topping pattern suggests minimum correction to 3260.Maximum to 3090.

Important Cycles 

In February, three important cycles are scheduled to make their lows:the 2-yr cycle, the 20-wk cycle, and the 80-day cycle.  

                                                                                                                                                                                                                              Market Analysis (Charts courtesy of QChart)

SPX-IWM weekly charts  

For the first time since this uptrend started on 9/29/19, SPX is showing the potential for a significant reversal. This is due to the cycles mentioned above along with a P&F projection met at ~3330, but the main trend line is still intact.  

The reaction in IWM was more aggressive, breaching its intermediate trend line.  

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SPX daily chart 

Last week, supply overcame demand and a correction started.Important cycle lows (which I marked on the chart) were approaching and it was just a matter of time before they started to influence investor psychology. This is what cycles do and, although they are mysterious universal forces which are little understood, they are readily observed in every aspect of life. In the stock market -- as elsewhere -- the length of the cycle is proportional to the anticipated effect. So, the fact that we were due for a two-year cycle to make its low was a warning that we could expect more than a minor pull-back. Furthermore, several cycles bottoming in close proximity -- as is presently the case -- tends to have a greater impact than if they did so individually -- at least in the stock market.  

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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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