S&P 500 Index (SP500)

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Martin Armstrong: SPY Analysis for the Week of February 22, 2016

* February 20, 2016

SPDR S&P 500 Trust closing today of 192 so far is trading down about 5.822% for the year from last year's closing of 203.87. This market remains trading below last year's closing and thus is in negative territory for the year. We are trading below last month's close so currently this is still neutral to weak. This market has been in a bearish consolidation phase for the past 6 months. Some caution is necessary since the last high 212.08 was important given we did obtain a sell signal from that event established during July 2015. Analytically, my long-term view prospective in SPDR S&P 500 Trust remains in a bearish trend since we have penetrated last year's low of 180.38. This market has declined for the past 1 years since establishing its intraday high back in 2015.

Historically, this market experienced a Phase Transition from the low of 1993 to the high of 2015 which amounted to about a 600% advance. Clearly, this market remains in a bullish position on the yearly level by closing above 31.82 on an annual basis. Support now lies at 114.12. So far, this market has remained in a bearish tone since the 212.08 major high established back in 2015.

Viewing the immediate trend is turning bullish since this market has exceeded the week of February 8th's high. This is warning to focus on this trend since last month had closed lower so the upward momentum is weak on a monthly level.

On our Pattern Recognition Model, we see current projections on each time level as follows: Beginning with the yearly level, I see the pattern projection currently on a dynamic basis so far this year is pushing higher. Viewing the quarterly level, I see that here the pattern status is turning up. Considering the pattern model for the monthly level, here I can see our pattern position remains suggesting that this is a Reaction High. Turning now to the weekly level, the pattern status currently is caution pressing lower. Regarding the daily level, I can see our pattern posture remains reaction low. At this moment, this market is in a downward trend on all our indicators looking at the weekly level. Regarding the direction of this trend, we have been moving down for the past 2 weeks. The last high on the weekly level was 194.58 created during the week of February 1st. The last weekly level low was 181.02 formed during the week of January 18th. Taking a broader view, this market is in a downward trend on all our indicators looking at the monthly level. Looking at the direction of this trend, we have been moving down for the past 2 months. The last high on the monthly level was 210.41 created during November 2015. The last monthly level low was 181.02 formed during January.

• George.

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