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S&P 500 Index Cash Analysis
By Carl Swenlin | May 27, 2017

Analysis for the Week of May 29, 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. We now breakout of this range to proceed in that direction be it up or down technically speaking. As of the close of Fri. May. 26, 2017, the market is immediately in a bullish posture near-term suggesting it is quite strong trading above the December 2016 high, however this was an inside trading day so technical closing support lies at 240801 and a close beneath that will suggest a retest of support first. S&P 500 Cash Index closed today at 241582 and is trading up about 7.90% for the year from last year's closing of 223883. Thus far, we have been trading down for the past day, but this has been an inside trading session warning caution following the high established Thu. May. 25, 2017.

On the weekly level, the last important high was established the week of May 22nd at 241871, which was up 8 weeks from the low made back during the week of March 27th. We have been generally trading up since that low, which has been a move of 2.80% percent in a stark panic type advance. The broader perspective, this current rally into the week of May 22nd has exceeded the previous high of 237836 made back during the week of April 3rd. We have seen a rally so far from the last low at 232225 made the week of March 27th, 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 as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 8 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.

Rationally, my comprehensive 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 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.

On the subject of 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. Considering all factors, there is a possibility of a rally moving into 2019 with the opposite trend thereafter into 2023. Focusing an 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. Directing our attention to 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. Focusing on the potential for sharp movement, 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.

Directing our attention to the immediate trend remains bullish since April made new highs and we have exceeded that high so far this month. This is further illustrated given the fact that last month also closed higher. 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 upside which is implying we have a bullish bias currently. Currently, this market remains in an uptrend posture on all our indicators looking at the weekly level. We see here the trend has been moving up for the past 29 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 241871, which was created during the week of May 22nd. 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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