Tag Archives: SP 500

SP 500 Cash Index Cycle Location

On /1/24/2017 it took out prior swing high at 2282.10 and made a new high.  This action extended the beta cycle phase on both the daily and weekly cycle level. We suspect it will eventually crawl to 2300ish level before any significant correction.  The buy the election and sell the inauguration trade was too obvious and too easy.  The market is doing

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SP 500 Cash Index Cycle Location

On the day of inauguration, the SP 500 index gapped higher at open. But it failed to exceed 15-minute open range.  The intraday high was made at open.  Open range high is statistically significant.  It means the market had good reaction to good news (inauguration), but there was no follow through.  Simply there weren’t continuous buyers

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SP 500 Cycle Location Update

We were at the 10th bar in the 3rd daily cycle.  The last nine trading days have been range bound between 2254.25-2282.10.  The high @ 2282.10 established on 01/06/2017 has not been violated.  Violation of 2254.25 on the downside will indicate the selling pressure is picking up.  The selloff will last at least until Jan 26, 2017 to be around 2200 price level.

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Most Likely SP 500 Weekly Top is In

Today’s intraday weakness that let the index to take out a prior low @ 2264.06.  This action made the prior high @2282.10 a swing high.  Most likely this swing high is also a bear top for the 3rd daily cycle, which is also the weekly beta cycle high if this high @ 2282.10 is not violated by Jan 19, 2017.  This swing high occurred in the daily bear top timing band. 

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The Pending Correction

The S&P 500 index four-year cycle bottomed on 2/11/2016.  Since then, we have had three weekly primary cycles.  The cycle performance is as below:

Weekly Cycle Low to High High to Low
2/12/2016-7/1/2016 20-week cycle 17 weeks advanced 310 pts, 17% advance 3 weeks dropped 129 pts, 6% correction
7/8/2016-11/4/2016 18-week cycle 7 weeks advanced 202 pts, 10% advance 11 weeks dropped 110 pts, 5% correction
11/11/2016– 6 weeks advanced 194 pts, 9.3% advance

As the table illustrated, the so called “trump rally” is the weakest among the previous two weekly cycles.  The most bullish weekly cycle is the cycle coming out of the longer term four-year cycle.  As we are getting closer to the one-year mark of the four-year cycle, we are anticipating a correction that will correct the cumulative advance since February 2016.  That will lead to a seasonal low in the first quarter, most likely in February/March time frame.

Based on the percentage decrease of the subsequent cycle strength, we project this weekly cycle high to be 2280-2300.  The pending correction either falls on the first channel line or the second channel line.  The projected correction is either 7-week 5.5% decrease to 2100-2120 or 11-week 8% correction to 2100-2175.

The correction is imminent.  The most likely time frame is immediately after the inauguration.  Smart money has already left the market before the ceremony.  Keep your powder dry and reload during the seasonal low in February/March 2017.