Current Position of the Market

SPX: Long-term trend – Bull Market

Intermediate trend – SPX has resumed its uptrend in order to complete the last phase of the bull market.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses longer market trends.

Market Overview

The first phase of the correction from 2116 was mild but, after a brief hold, the decline accelerated into Friday, bringing the total loss to almost 100 points.The short-term is now very oversold and some positive divergence is beginning to appear in the hourly indicators. The vicinity of some key projections levels have also been reached, all of which, under normal circumstances, would call for at least an oversold rally. However, Friday night’s terrorist attack in Paris may delay a recovery although, by Monday morning, emotions will have had a chance to somewhat subside.

A more important question about whether or not we have made a short-term low is, what does all this weakness mean? Is it only the volatile nature of the market which tends to reach its objectives quickly, or should we start having some second thoughts about the generally accepted notion that we are in wave V?  It’s too early to pass final judgment on the market’s position, and we should not feel pressured to do so. The next couple of weeks should clarify where we are in the current bull market, and what we can expect the near future to bring. For now, let’s go through the charts to see what they tell us – to date!

Intermediate Indicators Survey

As a result of the correction, the weekly MACD flattened at -4.60 and the histogram lost ground but remained positive.

The weekly SRSI brought its shorter MA down to the longer one, but did not go through.

The NYSI (courtesy of StockCharts.com) peaked at last week’s 508 and started to correct a very overbought RSI and MACD to a more normal level.  Those indicators remain in an uptrend, as does the index itself.

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