The Bullish Trend Continues

Current Position of the Market - The Bullish Trend Continues

  • SPX Long-term trend: There is some evidence that we are still in the bull market that started in 2009. This trend could continue into the first half of 2021 before major cycles take over and it comes to an end. 
  • SPX Intermediate trend: SPX is starting on the next phase of its intermediate uptrend.
  • Cycles: Looking ahead.
  • 90-year 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 - NYA Weekly Chart

The NYSE index is the broadest based index. That means that it is made up of more stocks than any other U.S. listed index. By tracking it with the SPX, which is a hybrid of the DJIA and NDX, we can arrive at a better perspective about the current state of the U.S. stock market.  

In addition, because NYA is comprised of most listed stocks, by comparing market breadth (advancing issues vs. declining issues) to the price index we can augment that perspective. On the chart below, we can see that the MACD of the A-D was the first indicator to give us an early warning of the 2020 correction. And by using it in conjunction with the SRSI and CCI, as well as being aware of the index’s price relationship to its 50-week MA, we can greatly improve market timing.  

We are expecting major cycles (listed above) to make their lows over the next few months. They are expected to bring about a decline which could easily exceed the 40% retracement of the March 2020 decline, but spread over a much longer time-period. It therefore behooves us to keep an eye on these indicators to see if they are signaling that the stock market is in imminent danger of starting a major correction.

As of now, they are not. So, we will revisit them in a few weeks when the market is closer to the high suggested by the SPX Point & Figure long-term chart.

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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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