Is The Uptrend Already Resuming?

Current Position of the Market - Is the Uptrend Already Resuming?

  • 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 end it.
  • SPX Intermediate trend: SPX may have completed a phase of its intermediate uptrend and it may be consolidating.
  • Cycles: Looking ahead.
  • 90-yea 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

TLT is the 20-year treasury bond ETF. Below is its weekly chart which shows that it traded last week at its lowest level since March/April of 2020. Conversely, its yield rose to the highest point since that date. It is also obvious that it is close to breaking a support level and could, over time, go on to challenge lower support levels which are, admittedly, much lower.  

Rising yields equal rising inflation. At this point it is very subdued, but a continued increase could begin to affect the market. Large growth tech stocks are particularly vulnerable to rising yields, and the decline in the 20-year bond is probably the reason why the NDX has been relatively weak lately. We will also see if the move in TLT was enough to kick-start the languishing metals.

Last week, I mentioned that some important stock market cycles lie ahead. At some point they will affect the market along with rising yields if this trend continues. But we are not there yet, and projections based on the congestion made at the March low suggest that SPX could rise about 400 more points before we should become concerned that the index has reached a major top.

It is important to be aware, however, that the 12-year bull market is in the final months of its trend and that we should begin adjusting our thinking in regards to that fact.

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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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