Market Direction and Stock Trends

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S&P 500 Index (SPX) »» Weekly Summary Analysis
By: Marty Armstrong | May 27, 2023

The S&P 500 Cash Index has been in an uptrend for the past 2 days closing above the previous session's high by 0.95%. The broader rally has peaked with the last high established at 421291 back on 05/19 5 days ago. We did elect 2 Bearish Reversals from this high. Clearly, this high was formed after a rally of 11 days.

Currently, the market is trading somewhat bullish on our indicators still showing overhead resistance but it is trading strongly higher up some 2.01% from the previous session low. Our projected target for closing resistance for the next session stands at 426731, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Nevertheless, this session closed below our ideal projection for closing resistance warning that the market which stood at 422750 is forming a high. A break of this session's low of 415616 will warn that we have a potential temporary high in place.

Up to now, we still have only a 1 month reaction rally from the low established during March. We must exceed the 3 month mark in order to imply that 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 Tue. May 7, 2024. 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 2022 and 2007 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical perspective in the S&P 500 Cash Index included a rally from 1974 moving into a major high for 2022, the market has pulled back for the current year. The last Yearly Reversal to be elected was a Bullish at the close of 2020 which signaled the rally would continue into 2022. However, the market has been unable to exceed that level intraday since then. This overall rally has been 2 years in the making.

This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2021. Pay attention to the Monthly level for any serious change in long-term trend ahead.

Looking at the indicating ranges on the Daily level in the S&P 500 Cash Index, this market remains moderately bullish currently with underlying support beginning at 417968 and overhead resistance forming above at 420922. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.

On the weekly level, the last important high was established the week of May 15th at 421291, which was up 31 weeks from the low made back during the week of October 10th. This was a key week for at least a temporary high on the Pi cycle. We have seen the market drop sharply for the past week penetrating the previous week's low and yet it recovered to close above the previous week's close of 419198. We are still trading above the Weekly Momentum Indicators so we have not undermined critical support as of yet.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2022. However, this market has rallied in price with the last cyclical high formed on 2022 and thus we have a divergence warning that this market is starting to run out of strength on the upside.

After closing above last year's low of 366271.

The market is trading some 0.23% percent above the last high 419544 from which we did originally obtain one sell signal from that event established during February. Long-Term critical support still underlies this market at 372320 and only a break of that level on a monthly closing basis would warn of a break of the current uptrend. At this time, the market is holding and is trading above last month's high as well.

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