The cycle indications are a mixed bag this week. The market should be coming off a test of a 13 week and 6-8 week cycle low, but indicators xxx xxxxxxx (subscriber version only). There are still a couple of cycle projections that suggest the possibility of slightly lower lows around xxxx-xx (subscriber version only). A xxxx xxxxxxx in the market averages would be necessary this week to confirm an upturn in those cycles. Otherwise, the flat down phases in 6 month and 10-12 month cycles could turn from ho hum to nasty absolute downturns.
On the third rail chart we see a completed head and shoulders top pattern that measures to 4200. Friday’s rebound came back to a broken trendline, which is a normal return to the scene of the crime after a breakdown. If the market clears xxxx (subscriber version only), however, it would be short term bullish.
On the weekly chart, the long term uptrend is bending, but it remains unbroken. The xxxxx (subscriber version only) area is now a critical fulcrum. If it creates space to the upside, then the market could trundle up along the next trendline, or accelerate if it breaks through. That line rises from about xxxx to xxxx in October. The SPX would need to break xxxx to signal an intermediate downtrend.
Long term momentum indicators suggest higher for longer. They normally form negative divergences long before price peaks. We’re on the lookout for that.
On the monthly chart, the S&P 500 started a new monthly bar. The uptrend channel remains intact. SPX would need to end October below 4xxx (subscriber version only) to break the uptrend channel. If that happened, the target would be 3900-4000. If the uptrend stays intact, the market could head for a very long term resistance trend at xxxx.
The monthly long term cycle momentum indicator remains bullish.
Cycle screening measures are weaker than the market averages and are not in position to render strong bullish signals this week. Both the intermediate term and longer term trends in this indicator are weak, suggesting more stocks are struggling than the market averages are showing.
These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance.