Replies to post #26191 on CHARTS_CCI_SYSTEM

[rimshot]

June 26, 2020 10:01 pm ET

This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron's.

Fed Model’s Bullish Message

CFRA -- cfraresearch.com

June 22: The overriding question these days is how to justify the market’s march higher. Many analysts acknowledge that the S&P 500’s P/E ratio trades at an historically lofty extreme, relative to its 20-year average, but then remind us that interest rates continue to shimmy beneath an ever-lowered limbo bar. As a result, recent conversations have resurrected the Fed Model, which places a value on the S&P 500 by dividing its forward earnings-per-share estimate by the current interest rate for investment-grade (IG) bonds (target=EPS/rate). The IG rate is selected as investors continually compare the relative attractiveness of stocks versus bonds. Using the June 19 Moody’s Baa yield of 3.57% and the S&P 500’s next-12-month EPS projection of $127.21, according to S&P Capital IQ consensus estimates, the Fed Model implies that the market could be trading around 3563 a year from now, or 15% higher than its June 19 close.

—Sam Stovall

[rimshot]

$NYA monthly has paused slightly below its declining 10-month SMA, so be alert for whether price actually holds above the 10-month on a lasting basis -

http://stockcharts.com/c-sc/sc?s=%24NYA&p=M&st=2005-01-01&i=p04170211582&a=167865155&r=1594906255141

* the monthly RSI-10 advance has paused near the 50 level, and the bulls need RSI above the 60 level for a period of time to cement the ongoing bullish potential characteristics in order to develop upside Staying Power ... above 50 will be an important start to more up for the RSI and price

bears need RSI-10 to hold below the 40 level to achieve downward traction

[rimshot]

3226.56 = $SPX daily close high in July, so far
vs.
3232.39 July close high

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3274.39 = $SPX weekly 15,2 Upper Bollinger Band value at this moment and that UBB has been declining for all of July

* bulls want to eventually see price break above and then hold near a rising weekly Upper Bollinger Band

this is for future reference in case we see $SPX 3270's to 3290's by end of next week

3324 = 104,2 UBB on the weekly chart ( represents the 2-year Bollinger Band math over the 104 weeks )

3261.65 = weekly 156,2 UBB value at this moment - BB math over 156 weeks

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SPY weekly 50,9.4 EMA envelope upper boundary nearly matches the $323.04 July intraday price high, and bulls want to see price hug or surpass the upper boundary for multiple days/weeks

http://stockcharts.com/c-sc/sc?s=SPY&p=W&yr=3&mn=0&dy=0&i=p76626574790&a=587618186&r=1594949676404

* bulls want to see the 15,3,5 Full STO continue to reside at the upper region

* the 15,2 %B has significant potential distance remaining to advance toward its 1.0 level