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Replies to post #65994 on S&P 500 & Nasdaq Analysis and Trends
12/10/22 12:45 PM
This market made a new high today after the past 2 trading days. The market opened lower and closed lower. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 1113870. Therefore, this market closed below the opening print while also closing down from the previous closing.
Clearly, this market has broken under the former broader cyclical support which now resides above the market at 1117235 rendering it vulnerable to a further decline at this time. The market crossed that critical cyclical support four sessions ago confirming a bearish trend and now only a rally back above this level would signal a reversal in the tone of the the market implying a rally ahead.
During the last session, we did close above the previous session's Intraday Crash Mode support indicator which was 1075159 settling at 1108200. The current Crash Mode support for this session was 1081801 which we closed above at this time. The Intraday Crash indicator for the next session will be 1090801. Remember, opening below this number in the next session will warn that the market may enter an abrupt panic sell-off to the downside. Now we have been holding above this indicator in the current trading session, and it resides lower for the next session. If the market opens above this number and holds above it intraday, then we are consolidating. Prevailing above this session's low will be important to indicate the market is in fact holding. However, a break of this session's low of 1099926 and a closing below that will warn of a continued decline remains possible. The Secondary Intraday Crash Mode support lies at 1053928 which we are trading above at this time. A breach of this level with a closing below will signal a sharp decline is possible.
Intraday Projected Crash Mode Points
Today...... 1081801
Previous... 1075159
Tomorrow... 1090801
This market has not closed above the previous cyclical high of 1154677. Obviously, it is pushing against this resistance level.
Up to now, we still have only a 1 month reaction rally from the low established during October. We must exceed the 3 month mark in order to imply a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NASDAQ Composite Index Cash, 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 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 historical perspective in the NASDAQ Composite Index Cash included a rally from 2009 moving into a major high for 2021, the market has pulled back for the current year. The last Yearly Reversal to be elected was a Bullish at the close of 2019 which signaled the rally would continue into 2021. However, the market has been unable to exceed that level intraday since then. This overall rally has been 12 years in the making suggesting it could still press higher for another year.
This market remains in a positive position on the weekly to yearly levels of our indicating models.
From a perspective using the indicating ranges on the Daily level in the NASDAQ Composite Index Cash, this market remains neutral with resistance standing at 1100621 and support forming below at 1094437. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply a bounce is unfolding.
On the weekly level, the last important high was established the week of November 28th at 1154677, which was up 4 weeks from the low made back during the week of October 31st. 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 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.
Looking at the longer-term monthly level, we did see a correction from the key high of August for two months. Since that low made in October, the market has rallied for 1 month. Meanwhile, the past month has witnessed a rally of 13% percent. A month-end closing below 1026293 will warn that the market is losing its upward momentum and should retest support below. It will take generally a monthly closing above 1149262 to maintain a near-term upward rally.
Some caution is necessary since the last high 1318109 was important given we did obtain three sell signals from that event established during August. That high was still lower than the previous high established at 1621223 back during November 2021. Of course, that was the major high in this market, which means we have a downtrend for the past 12 months. Nonetheless, we have elected three intermediate Monthly sell signals to date from the turning point of November 2021 on this monthly time level from that major high so there is still important underlying support which needs to be broken to change the trend on this time horizon. Critical support still underlies this market at 853770 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak.
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