Charts & Comment 09/29

s&p 500 daily chart

 

I’ve updated monthly charts, with comments.

In the August long term update i wrote:

…”Long term, from a  Murrey Math point of view, with the 7/8th MML Pivot high taken out, the S&P 500 could in fact be targeting the major 8/8 MML (Murrey Math Line) up at 2500.

Even a ‘throwover’ of this area is not ruled out, before the tide could be turning at some point this Fall, which is a seasonally weak part of the year for the markets. Significant reversals have often been the outcome in the past, when the market reached these strong 4/8th or 8/8th MML’s.

The 2500 resistance area also roughly represents the earlier mentioned major L3 DGL, with long term momentum still holding on to it’s bearish mode, despite the ongoing price advance.”…

The September trading month ended at 2519.36, slightly beyond this major 8/8th MML. So in case this is developing into a throwover situation, the so called +1/8th MML is up at the 2562.5 level. Which also roughly represents the L3 DGL  resistance area for the October trading month.

The next higher +2/8th MML is at 2625. Any advance going beyond this area, would likely prove me wrong about this throwover scenario. This MML also fits with the level where a major trendline convergence is observed on the S&P 500 monthly chart.

The market close near the month’s high, often means it wants to trade even higher in the month thereafter. So a continued advance towards these suggested resistance zones, could be the outcome for a part of the October trading month.

Bonds reversed sharply in September on increased Volume, indicating August’s upside breakout looking behavior was a false one. This is also indicated by using a slightly adjusted trendline, which was not broken. Trendline support is still intact though, it would take a clear monthly close below this area, to open up for more weakness in the Bond market.

Because Bonds went lower, the TYX Yield reversed higher, after testing the 50% retracement support area. Strong resistance is up around the 31-32 level, in case the Bond market falls below support in October.

Gold made a retreat towards the trendline it broke through in August. So technically, this could be a typical snap-back move towards a broken trendline, before heading higher again. It could also fit with potential seasonal stock market weakness in October, where a possible flight into Gold could drive this market higher. In case i’m wrong about this and it instead closes into the triangle pattern, then support comes in right under the 1200 level.

Light Crude pushed higher in September and closed at 51.67, up against a trendline coming down from the 2015 peak. At this point this can be labeled as a wave 2 underway but if it breaks above the trendline and takes out the 2017 high, then it can in fact be a wave c developing, as part of an a-b-c wave 4 corrective pattern from the 2016 low.

As for Real Estate, it has been in a consolidation phase up against trendline resistance for 8 months, so still looking for directional clues here. Any monthly close above this long standing resistance area, could wake up this market and push even higher.

Any monthly close below trendline support, on the other hand, could be quite bearish for this market.

The Dollar has once again tested the 50% retracement support, forming a bullish Pin bar after the September trading, which could mean it’s going for a test of trendline resistance in the coming month(s).

Short term, after a dip at the start of the week, the S&P 500 daily reversed and reached the suggested trendline target at the end of the week. Because of this, RSI-2 has reached an overbought extreme. So any reversal bar forming early next week, could indicate some weakness coming, towards short term support at 2500.

If it fails to hold, it would be increased evidence of a more significant top in place, as weekly momentum is getting quite overbought and is due for a reversal. If so, a natural first downside target to look for, would be long standing weekly trendline support, seen on the same chart.

 

09/22

A few technical observations after this trading week:

Short term, the S&P 500 market reversed from trendline support Friday, with RSI-2 at the same time leaving it’s oversold territory. So one more move higher towards trendline resistance could be the outcome early next week.

The earlier mentioned major 8/8th MML (Murrey Math Line) target is now reached. The 4/8th and the 8/8th MML’s often causes significant reversals in the market.

In this case, the test is coming from below and with overbought weekly momentum at the same time forming a double bearish divergence vs. new highs in prices.

And a bearish divergence is observed in FCX daily (Copper & Gold) vs. the S&P 500.

In addition, this week’s trading session formed a reversal bar up against weekly trendline resistance.

Volatility, VIX daily once again reached the long standing support area Friday, down around around 9.5.

So all in all, this technical situation and a higher Volatility (fear) outlook, could mean the market is heading lower soon, (mid term included) possibly after one more push higher, near term.

09/08

Updated monthly charts available, with a brief comment included on some.

Long term, the S&P 500 market is more or less at the same level as at the July close. Bonds and Gold are breaking out to the upside, while Yields and the US Dollar went lower in August.

Light Crude reversed from resistance on a Volume spike, so the big boys are selling it seems.

As for Real Estate, it has been in a consolidation phase up against trendline resistance for 7 months, so still looking for directional clues here. Any monthly close above this long standing area, could wake up this market and push even higher.

Any monthly close below trendline support, on the other hand, could be quite bearish for this market.

Short term, due to the overlapping price patterns from the Aug. high, the S&P 500 is most likely working on a w-x-y correction to the downside, with the finer degree labeling shown on this houry chart.

The directional breakout from the minor triangle pattern seen on the daily chart, should give a clue as to where this market is heading next, towards natural resistance/support levels as drawn on the chart.

 

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