Intermediate Trend Intact

Current Position of the Market

  • SPX Long-term trend: There is some good evidence that we are still in the bull market that started in 2009, which could continue into the first quarter of 2021 before coming to an end. 
  • SPX Intermediate trend: May continue until SPX reaches 4150 in February.

Intermediate Trend Intact

  • Cycles: Looking ahead. 90-year cycle – last low: 1932. Next low: 2022. 
  • Seven-year cycle – last low: 2016. Next low: 2023.
  • Short-term low: Jan. 25-29.

Market Analysis: SPX-IWM Daily Charts

IWM continues to keep up with SPX, suggesting that the intermediate trend is intact. It is noted, however, that the oscillators of both indices are showing some mild negative divergence. This could signal some trend deceleration ahead. 

SPX Daily Chart

Since it made an intermediate low at 3234 on Nov 2, SPX has continued to move in a rising intermediate channel punctuated by short-term corrections of two or three days each, followed by a new all-time high.

These minor corrections are brought about by small cycles making a low, some of which are identifiable and can be anticipated, such as the 20-td cycle which created the last bottom and prompted a quick 110-point rally to 3860 before the next minor cycle (~29-td) took control, and is in the process of creating the next reversal with a low due around Tuesday of next week.

However, the negative divergence in the daily chart could be telling us that something more (possibly another cycle) could extend the correction a few more days. 

The breaking of the green uptrend line would probably also initiate a slightly longer correction, although the P&F chart does not show that much distribution at the current top. In any case, until we get a clear signal from IWM that an intermediate top is being struck -- confirmed by the P&F chart base count which suggests that this will not take place until we get to ~4150 -- it does not look as if the bulls have too much to be concerned about right now.  

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Charts courtesy of QCharts.

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