Weekend Observations for 4.6.19

SPX BULL MARKET CONTINUES – this is a bit of a detailed update to one of my specialty charts that filters bull market conditions from bear market conditions…

In my SPX forecast made on 4.9.16, I called for the SPX to remain in a bull market through 2021, so was a bit surprised with the relative weakness in US equities in November and December of 2018…

Of all the economies in the world, the US economy is one of the strongest and most resilient, so rather than denying what was happening for all the world to see, I had to dig deeper for understanding…

 

 

 

I absolutely was expecting Europe to move into economic recession, and the same was true for Asia…

The +25-year bear market in the US dollar had ended years ago, and a new bear market in bonds was just beginning…

The bear market in gold had not yet completed and while oil was in a corrective state, its long-term bull market still had an appointment with new ATHs… so the relative weakness in US equities was not making any sense until the incredible market breadth and rally in the early weeks of 2019 helped tell the new narrative for US equities…

All those other factors remained true, AND the momentum indicator line on the SPX quickly moved back within the gray bubble zone – so the bull market in US equities was still in tact, though a reset in momentum was needed to EXTEND the time frame for this great bull market in the US equity markets beyond 2021…

Long post, I know, but context is needed from time to time… this week the momentum indicator line has extended its push upward past the confluence of the TLs, and its next higher target remains the long-term DTL… watching.

 

SPX-W-4-5-19-1.jpgLink to larger chart:  Link 

 

CONTEXT – I mentioned a few things in my earlier post today that probably should also be put into context…

First, my forecast from 4.9.16 – the first chart is the very exact chart from nearly three years ago wherein I forecast that the SPX would move upward from the ~2000 range (2047.60) to the ~3600 range in this final installment of the US equity markets’ bull market cycle…

I absolutely nailed the wave-(iii) high of January 2018, to within 3.5-points of the actual high!!! I next called for a wave-(iv) completion at ~2696…

What actually happened, I covered in my earlier post – rather than the SPX stopping at my target of ~2700, it proceeded down to the 14.6 Fibonacci level at the ~2350 range in Wave-(w):(iv), in what has morphed into a double zig-zag corrective fractal…

The second chart provides the adjustment I’ve made to the forecast in light of the US equity markets electing to to extend beyond the 2021 time frame…

Despite the helluva rally we’ve seen in the US equity markets since the December 2018 lows, the fractal is NOT impulsive, but corrective (three wave fractals), with wave-(x):(iv) still in work, with a target up at the 78.6 Fibonacci level – ~3290 range…

Once complete, then wave-(y):(iv) will come back to my original ~2696 wave-(iv) completion target to complete a nearly 3-year larger corrective fractal structure, and then the SPX will rally upward nearly 100% into the 2028-2032 time frame to the ~5100 range…

There’s a lot happening between now and then, but at least this provides some measure of context to my longer-term forecasting… watching.

 

SPX-W-EW-4-9-16-Alt.jpgLink to larger chart:  Link 

 

SPX-W-4-5-19-Actual-1.jpgLink to larger chart:  Link

 

SPX – This is the SPX monthly chart which I made mention of late last week…

As I thought, the momentum indicator line straightened back upward, and I think will push upward to the DTL as wave-(x):(iv) comes to its completion…

The modified Wilder’s ATR trailing stop also printed, and as I said, moved up to a higher trigger point at 2614.51 – a close below that level is a reversal to a sell – fortunately, my SAR swing system is far more sensitive and robust than that, and would have us back on the short side almost 200-points higher…

So on the SPX, the trend is upward short-term (ST), intermediate-term (IT) and long-term (LT)… watching.

 

Link to larger chart:  Link

 

SPX – Here’s a comparative chart of the SPX daily with the daily charts of the DAX (Germany), the CAC 40 (France) and the FTSE 100 (UK)…

While it clearly shows the out-performance of the US equity markets, compared to the European markets, what it cannot show is the momentum trend of any of the individual indices…

With the potential for a liquidity crises sparking in May, the momentum indicator lines on these indices will absolutely matter, and I will feature them tomorrow… watching.

 

 

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