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Martin Armstrong: S&P 500 Index Cash

* September 24, 2016

Analysis for the Week of September 26, 2016

We should see a trend change come September in S&P 500 Cash Index so pay attention to events ahead. Last month produced a high at 219381 and so far we are trading neutral within last month's trading range of 219381 to 214758. We need to breakout of this range to confirm the direction. Therefore, a close above will be bullish and a close below will warn of a possible decline. As of the close of Fri. Sep. 23, 2016, the market is immediately in a bullish posture near-term with a distinct bullish undertone suggesting caution on the daily level trading above the December 2015 high. S&P 500 Cash Index closed today at 216469 and is trading up about 590.7% for the year from last year's closing of 204394. Thus far, we have been trading down for the past day, following the high established Thu. Sep. 22, 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 been generally trading up for the past week from the low of the week of September 12th, which has been a move of 2.81% percent. Interestingly, the S&P 500 Cash Index has been in a bullish phase for the past 6 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 buy signals from that event. This warns that the trend is robust moving forward. Critically, my broader analysis looking forward 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. Penetrating intraday last year's low of 186701 will confirm a serious correction into next year. 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.

Addressing 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. We show a potential for 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 important timing model, the Directional Change Model targets are during 2023 and during 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. Aiming on 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. Nevertheless, our Panic Cycle target, for the next period to watchis during 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.

Directing our attention to the immediate momentum is Neutral on the weekly level yet we did penetrate the week of September 12th's low. Some caution is warranted given the fact that last month closed lower. So far, this is an outside reversal to the upside, which is a significant move. . On the weekly level, last month was an outside reversal to the upside which is implying we have a bullish bias currently. Generally, this market is in an uptrend position on all our weekly indicators for the near term trend. We see here the trend has been moving up for the past 12 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 6 months. The last monthly level low was 181010, which formed during February. The last high on the monthly level was 219381, which was created during August.

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