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S&P 500 Index Cash Analysis
By Marty Armstrong | August 12, 2017

Analysis for the Week of August 14, 2017

S&P 500 Cash Index UPDATED AS OF THE CLOSE OF Fri. Aug. 11, 2017: Identifying when the next turning point should arrive, that seems to be coming this month in S&P 500 Cash Index at least on a closing basis if not intraday requiring carefulness. The key week ahead for a turning point is 8/14. Last month produced a high at 248404 and so far we are trading neutral within last month's trading range of 248404 to 240770. 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. Here we have a long-term bullish trend in play since the historical low took place back in 1950 followed by the historical high in 2017, which constituted a 67 year rally. As of the close of Fri. Aug. 11, 2017, the market is immediately in a neutral posture near-term for now on the daily level. S&P 500 Cash Index closed today at 244132 and is trading up about 9.04% for the year from last year's closing of 223883. So far, we have been trading up for the past day since the reaction low made on Thu. Aug. 10, 2017.

On the weekly level, the last important high was established the week of August 7th at 249087, which was up 40 weeks from the low made back during the week of October 31st. We have been generally trading up since that low, which has been a move of 3.54% percent in a stark panic type advance. The broader perspective, this current rally into the week of August 7th has exceeded the previous high of 245382 made back during the week of June 19th. We have seen a rally so far from the last low at 208379 made the week of October 31st, and only a break of that low would signal a technical reversal of fortune. Otherwise, the market remains in a bearish mode right now warranting caution. Looking at this from a wider perspective, this market has been trading up for the past 19 weeks overall. Interestingly, the S&P 500 Cash Index has been in a bullish phase for the past 13 months since the low established back in June 2016.

Critical support still underlies this market at 203968 and a break of that level on a monthly closing basis would warn of a decline ahead becomes possible.

Prospectively, my broader outlook 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 193707 on a monthly closing basis. It is incredibly important to identify the broader trend for that is the underlying tone. It is wise to take position counter-trend only with this understanding of what you are doing.

Consequently, this has been a 1 year rally in motion since 2016. Caution is advisable since this is also 8 years up from the low of given that was the major low 2009. We must pay attention to the closing for this year. If we close lower at year end, beneath 223883, then we can see a pause in the uptrend into next year. Penetrating intraday last year's low of 181010 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 227753 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 181010 intraday will negate that outcome.

Aiming on the longer term yearly level, we see turning points where highs or lows on an intraday or closing basis should form will be, 2019, 2023 and 2026. There is a likelihood of a decline moving into 2019 with the opposite trend thereafter into 2023. This pattern becomes a possibility if last year's low of 181010 is penetrated even intraday. The most critical 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. Inspecting the volatility models suggest we should see a rise in price movement during January 2025. We look to the turning points to ascertain the direction. Volatility targets reflect only volatility.

Aiming on the immediate momentum is Neutral on the weekly level yet we did penetrate the week of July 31st's low. This is warning to pay attention since last month had closed higher so the upward momentum is weak on the monthly level. To date, the market has exceeded last year's high of 227753. In order to maintain an upward advance, we need to close above last year's high at year end. On the weekly level, last month was an outside reversal to the downside which is warning of a bearish immediate trend. 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 40 weeks. The last weekly level low was 208379, which formed during the week of October 31st. The last high on the weekly level was 249087, which was created during the week of August 7th. However, we still remain below key resistance 246354 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 17 months. The last monthly level low was 181010, which formed during February 2016. The last high on the monthly level was 248404, which was created during July.

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