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S&P 500 Index Cash Analysis
By Martin Armstrong | May 20, 2017

Analysis for the Week of May 22, 2017

We should see a trend change come this month in S&P 500 Cash Index so pay attention to events ahead. Last month produced a neutral inside trading range from the previous month. Respectfully, we are still trading neutral within last month's trading range of 239816 to 232895. 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 Thu. May. 18, 2017, the market is immediately in a bearish posture near-term for now on the daily level. S&P 500 Cash Index closed today at 236572 and is trading up about 5.66% for the year from last year's closing of 223883. Thus far, we have been trading down for the past 2 days, while we have made a low at 235272 following the high established Tue. May. 16, 2017.

On the weekly level, the last important high was established the week of May 15th at 240577, which was up 28 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 3.59% percent in a stark panic type advance. The broader perspective, this current rally into the week of May 15th has exceeded the previous high of 240098 made back during the week of February 27th. 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 strong at this time. Right now, the market is above momentum on our weekly models hinting this is still bullish for now. Looking at this from a wider perspective, this market has been trading up for the past 20 weeks overall.

Critical support still underlies this market at 208378 and a break of that level on a monthly closing basis would warn of a decline ahead becomes possible.

Broadly, my expanded view 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 199324 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.

Eyeing 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. Centering on the patterns unfolding, we do see a prospect 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. Nevertheless, 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. Eyeballing 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. Nonetheless, our Panic Cycle target, for the next period to watchis during 2016. 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.

Aiming on the immediate momentum is Neutral on the weekly level yet we did penetrate the week of May 8th'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. 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 28 weeks. The last weekly level low was 208379, which formed during the week of October 31st, 2016. The last high on the weekly level was 240577, which was created during the week of May 15th. 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 14 months. The last monthly level low was 181010, which formed during February 2016, 2016. The last high on the monthly level was 240098, which was created during March.

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