A Final Try At 4310?

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SPX daily chart

Because SPX is a hybrid between DJIA and NDX, strength in the latter kept SPX from severely damaging its uptrend by finding support on the dashed parallel to the intermediate channel line, which means that SPX may still be able to reach its standing P&F projection of 4310 before finding a top.  By printing 4286 near the close on Friday, this puts it only 24 points away from its target, and there should be enough oomph left in the short-term cycle to help it reach its goal next week, but perhaps not before a short-term pullback. 

From late October and 3234, SPX has been trading in a broad bullish intermediate channel. Since mid-April, it has pulled away from the outside channel line and has been moving across it with an obvious loss of upside momentum.  This is a warning that a reversal is near.  Breaching the first red horizontal support line should be a sign that an intermediate correction has most likely started, and it should be followed by a break of the inner channel line.  Even with the recent short-term rally, it is evident that the index is going to have difficulty continuing to make new highs, even though it did so on Friday. 

We should be made aware of the first top of this intermediate wave before the red support line is broken by weakness appearing in the oscillators.  After the index fully comes out of its channel and completes its correction, it should go on to make a final (bull market) high from the March 2020 low estimated to be at about 4550 (SPX, NDX).   

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SPX hourly chart 

The hourly SPX chart puts the topping phase of the daily chart – the last two months of trading – under the microscope.  It reveals a broad deceleration pattern in the form of a wedge which could be coming to an end.  Since we do not yet have a short-term reversal of the trend which started five days ago, the top trend lines that define the wedge may require a slight final adjustment, but the negative divergence which has formed in the CCI oscillator is an indication that it could happen at any time.  This is also suggested by the deceleration taking place in the short-term trend.  Ideally, the cycle powering the trend could have another three or four days to run before it reaches its peak and begins its down phase.  That may be just enough strength to get us to the 4310 long standing target.  

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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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