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Replies to post #36979 on Market Direction and Stock Trends
05/15/21 6:40 PM
The S&P 500 Cash Index has been in an uptrend for the past 2 days closing above the previous session's high quite significantly by 1.02%. The broader rally has peaked with the last high established at 423804 back on 05/07 5 days ago. We did elect 4 Bearish Reversals from this high. Clearly, this high was formed after a rally of 31 days.
Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 2.65% from the previous session low. Our projected target for closing resistance for the next session stands at 424625, 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 420628 is forming a high. A break of this session's low of 412958 will warn that we have a potential temporary high in place.
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. 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 2020 and 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 2009 moving into 2021. Prominently, we have elected three Bullish Reversals to date.
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 neutral with resistance standing at 417904 and support forming below at 414800. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 3rd at 423804, which was up 32 weeks from the low made back during the week of September 21st. 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 it closed lower. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction.
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 2020. However, this market has rallied in price with the last cyclical high formed on 2020 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.
A closing above last year's high of 376020 will warn of perhaps new highs into next year. A closing below that number would warn that this year could be just a temporary high.
Interestingly, the S&P 500 Cash Index has been in a bullish phase for the past 13 months since the low established back in March 2020.
Critical support still underlies this market at 363330 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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