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Martin Armstrong: S&P 500 Index Cash

* August 27, 2016

Analysis for the Week of August 29, 2016

We should see a trend change come August in S&P 500 Cash Index so pay attention to events ahead. Last month produced a high at 217709 during August. We need now to exceed that level to imply a continued advance. Support technically lies now at 207402 and a breach of that level will warn of a retest of key support down at 193709 becomes possible. As of the close of Fri. Aug. 26, 2016, the market is immediately in a bearish posture near-term for now on the daily level warning caution should be taken yet this market is still trading above the December 2015 high. S&P 500 Cash Index closed today at 216904 and is trading up about 6.12% for the year from last year's closing of 204394. Thus far, we have been trading down for the past 3 days,On a broader perspective, this market has been trading down overall for the past 9 days since the high established Mon. Aug. 15, 2016 following the high established Tue. Aug. 23, 2016.

On the weekly level, the last important high was established the week of August 15th at 219381, which was up 27 weeks from the low made back during the week of February 8th. We have seen the market rally for the past week from the low of the week of August 22nd, which has been a move of 1.50% percent. Interestingly, the S&P 500 Cash Index has been in a bullish phase for the past 5 months since the low established back in February.

Some caution is necessary since the last high 213472 was important given we did obtain two sell signals from that event established during May 2015. Critical support still underlies this market at 177044 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Subsequently, the market made a low in February at 181010 electing four sell signals from that event. This warns that the trend is robust moving forward. Expansively, my far-reaching view calculation recognizes that the current directional movement since the low made back in February 2016 has been a long-term Bullish trend in S&P 500 Cash Index which remains in motion as long as we hold above 203967 on a monthly closing basis.

Caution is advisable since this is also 34 years up from the low of given that was the major low 1982. We must pay attention to the closing for this year. If we close lower at year end, beneath 204394, then we can see a pause in the uptrend into next year. This market has penetrated last year's low of 186701 intraday which may indeed warn of a change in near term trend. A closing beneath last year's low will confirm a correction ahead. However, we have rallied to exceed last year's high last month. We need to see a closing above 213472 at year-end to see a continued rally is possible into next year. Exceeding this year's high next year and holding last year's low intraday will signal the bullish trend is still intact. A breach of last year's low of 186701 intraday will negate that outcome.

Inspecting the longer term yearly level, we see turning points where highs or lows on an intraday or closing basis should form will be, 2018, 2020, 2022 and 2024. There is a likelihood of a decline moving into 2018 with the opposite trend thereafter into 2020. This pattern becomes a possibility if last year's low of 186701 is penetrated even intraday. The most critical model, the Directional Change Model targets are January 2023 and January 2024. This model often picks the high or low, but can also elect a breakout to a new higher trading zone or a breakdown to a new lower trading level. Eyeing the volatility models suggest we should see a rise in price movement during January 2018. We look to the turning points to ascertain the direction. Volatility targets reflect only volatility. However, our Panic Cycle target, for the next period to watchis January 2015. Keep in mind that a Panic Cycle differs from just volatility. This can be either an outside reversal or a sharp move in only one direction. Panic Cycles can be either up or down. Watch the oscillators and the reversals to determine the best indication of the potential direction.

Bearing in mind the immediate trend is Neutral on the weekly level yet new lows have been made penetrating the week of August 15th's low. However, we closed toward the low of the trading session warning there is still some weakness. This is warning to pay attention since last month had closed higher so the upward momentum is weak on a broader monthly level. Overall, looking at the weekly level on our models, this market is currently in a rising trend. We see here the trend has been moving up for the past 8 weeks. The last weekly level low was 199168, which formed during the week of June 27th. The last high on the weekly level was 219381, which was created during the week of August 15th. However, we still remain below key resistance 217563 on a closing basis. On a broader perspective, this market remains in an uptrend posture on all our indicators looking at the monthly level. We see here the trend has been moving up for the past 5 months. The last monthly level low was 181010, which formed during February. The last high on the monthly level was 217709, which was created during July.

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