Tag Archives: weekly cycle

Follow the Price Action

Since August, we have been bearish expecting the market correction to run its course until sometime in October.  But the market had shown abnormal strength in the first nine trading days in September.  Because of the abnormal price action, we sent out private email notes on September 11th, which outlined the possibility that the correction bottom (early August low) might be in already.

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S&P 500 Cash Index Cycle Location 09062019

All three indices jumped over 50-day moving average last Thursday.  The 50-day moving average has been resistance since the selloff began in late July.  Does this break out of the 50-day moving average mean that the market is out of woods?

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What to Expect from the Second Half 0f 2019?

The last trading week of August was equally painful for the bears and bulls.  The market closed the volatile month of August in a neutral position, which means the immediate trend in motion may see follow-through into September.  The pivot range (2985-3004) of the S&P 500 cash index  for the second half of 2019 is calculated from the high, low and close of the first ten trading days of July.  S&P 500 index 2985-3004 price level will serve as the resistance for the second half of 2019. 

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S&P 500 Cash Index Cycle Location 08232019

In the last two weeks we have warned that the market has topped in late July.  We didn’t know what would be the exact fundamental reasons to cause the market move lower, but the price actions have shown plenty warnings in advance.  The market has shown amazing cyclical behaviors in the face of uncertainty, which allows us to forecast the market with reasonable confidence.

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The Correction is Not Over

Last week, the bears tried really hard to knock it down to pass the first initial S&P 500 selloff low @ 2822.12.  S&P 500 and NASDAQ successfully defended the August 5th selloff low, but the DOW was not able to defend the first initial low and made a lower low on August 15th.

All three indices fell below last month’s low on the first trading day of August.  August started on a very weak note.  August has been the worst month for stocks for the last 10 years and September has been the worst month for the last 100 years.  So seasonally we are in the worst period of the entire year.

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