The stock market soared after it found support on the daily 200 MA, (slightly above key Fib. support) a few days before the election day. Prices blasted through the trendline drawn from the September lower high but met too strong resistance from the trendline coming in from August and has consolidated there (daily closing basis) for the last few days.
With RSI-2 heading lower from an overbought extreme and the Neural Nets turning bearish after this trading week, odds are good a pullback is coming early next week.
This could take the form of a wave b, as part of what could be an a-b-c three wave higher, which should complete a one degree higher wave e into all-time high territory, sooner or later. The preferred wave labeling is better seen on this S&P 500 hourly chart.
An alternate wave count is a sharp wave 3 of 3, taking prices to an all-time high (Santa Claus coming to the market?)
The Bond market plunged through important trendline support and is soon reaching the 50% retracement support area, as seen on this TLT weekly chart.
Monthly Charts are updated.
Despite October seasonal weakness in the S&P 500 , important trendlines(s) support still looks intact after the Oct. trading month. Overbought OEX monthly momentum turned bearish but Wedge support is not yet clearly broken.
Investor fear is increasing, as Volatility – VIX monthly pushed higher, after it found strong horizontal support a few months ago.
30y US T-Bond Yield also pushed strongly higher and is most likely going to reach and test upper wedge resistance in November. Any clear monthly close above it, could open up for even higher interest rates.
Gold monthly is pulling back in what could be a wave b or 1, after a wave a or even a full a-b-c pattern most likely finished in the summer. First Fib. support was tested intra-month in Oct., with RSI-25 at mid readings.
Light Crude broke through trendline resistance in Oct. but pulled back and was not able to close above it. This market behavior formed a monthly bearish Pin bar, which could mean Light Crude is heading south in November.
Real Estate fell below trendline support in September and continued it’s weakness in October. Important channel support is down around 1470 for the November trading month.
The US Dollar broke out to the upside but closed up against another trendline in Oct. The buck needs to clear this and the key Fib. resistance area, to reflect strength and possibly continue higher
The Amazon stock reached major trendline resistance in September, with a bearish divergence observed in (overbought) RSI-25. October’s bearish reversal could be the start of a new trend, as a large five wave impulse structure from 2006 could have reached it’s termination point. More evidence of this will show up with any break of major trendline support.
Short term, let’s see if the S&P 500 daily can find a floor down at the key Fib. support area, around election day. Mid term, the OEX Weekly fell below 3 trendline support levels this week. The close near it’s low could mean some more weakness is coming, at least intra-week. First Fib. support is down at 908. Weekly momentum could be in an oversold condition at that point.