Market Direction and Stock Trends

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S&P 500 Index (SPX) »» Weekly Summary Analysis
By: Marty Armstrong | May 21, 2022

The S&P 500 Cash Index closing today at 390136 is immediately trading down about 18% for the year from last year's settlement of 476618. Up to now, this market has been rising for 2 months going into May reflecting that this has been only still a bullish reactionary trend. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 381032 while it's even trading beneath last month's low of 412428.

Up to now, we still have only a 2 month reaction rally from the low established during February. We must exceed the 3 month mark in order to imply a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in S&P 500 Cash Index, we do find that this particular market has correlated with our Economic Confidence Model in the past. Our next ECM target remains Mon. Apr. 10, 2023. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2007 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The S&P 500 Cash Index has continued to make new historical highs over the course of the rally from 1974 moving into 2022. We have elected two Bullish Reversals to date. Currently, the market has dropped back and is trading beneath the previous year's close warning of a potential correction in play.

This market remains in a positive position on the weekly to yearly levels of our indicating models.

Focusing on our perspective using the indicating ranges on the Daily level in the S&P 500 Cash Index, this market remains in a bearish position at this time with the overhead resistance beginning at 395817.

On the weekly level, the last important high was established the week of March 28th at 463730, which was up 5 weeks from the low made back during the week of February 21st. We have been generally trading down for the past 7 weeks, which has been a very dramatic move of 17.83%.

Immediately, this decline from the last high established the week of March 28th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 459531 made back during the week of January 31st. Nonetheless, that high was actually lower than the previous high made the week of January 3rd suggesting this market has really been running out of sustainable buying for right now. This decline has been rather important penetrating the previous low formed at 411465 and closed beneath it settling at 390136 warning we may have a shift in trend unfolding. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 6 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2021. However, this market has rallied in price with the last cyclical high formed on 2021 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.

This market is trading well beneath that high of January which was 481862 by more than 10 percent. Nevertheless, at this time, the market is still weak trading beneath last month's low.

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