SPX has now closed above the 2022 bearish trend line for a couple days and also on a weekly basis, and is attempting the previous resistance zone for a fourth time since May 2022 (Chart 1).
No change in large tracking counts (Chart 2) with several short-term scenarios (Chart 3). How SPX reacts to the resistance zone matters.
On the wave count for the above charts the chief problem for taking a bullish view at this time is the fact there is so far a clear ABC seq down from the 2021 peak, as MTU's Chart 2 purple count notes.
ReplyDeleteAnd on a 30 year chart (not shown) the massive run up from 2009 low has not corrected sufficiently under normal obv patterns for a new bull trend to commence.
You see a more interesting pattern on MID & RUT.
Normally the 10 yr cycle runs up from late in yr 2 of decade but sometimes does not (1972-1974).
Lets look at what we have as indicators for the bullish side of the SPX DJIA etc...
ReplyDeletePattern and possible upside breakout is inferred from current ST charts the past month.
Some main component stks have been holding above 50% etc... retracement levels after large corrections the past year or so. MMM BAC AMZN INTC IBM etc.. Those are contrasted against others (eg MCD WMT KO) being at highs still but they may move higher.
LT charts on EU indexes - UKX and DAX - looks as tho they may push higher. Possible.
I will be very interested to see if the Special Moving Average Calculator (SMAC) indicator/forecaster I have, mentioned in last weeks posts, wherein it indicates trend turned up last week for SPX, and almost due uptrend for DJIA, is proven in a month's time proves to have been correct. It is right 9 out of 10 times, and even if in error reverses within a week or so.
For your info MTU the history of my SMAC indicator is originated in the 1970s from somewhere in US, was acquired by a reliable mkt newsletter editor then and it was passed on to me in 1984. Its method / maths was never published. The editor used it for his own purposes, possibly in the newsletter. In the 1980s is often signaled a turn on some indexes just before or on the day it happened. But it also made mistakes at times. I have all the old charts on graph paper noting its turn points.
ReplyDeleteIt did predict the early 2020 super-slide in mid Dec 2019 when the indicator started sinking, and then turned up strongly in April 2020.
It seems to able to detect at least one hidden cycle system that is in the mkt. And its not an RSI.
Per my previous post, as of Mon 30 Jan 2023 close of 33717pts the Special Moving Average Calculator (SMAC) trend indicator I have for DJIA has now turned up.
ReplyDeleteBut past data shows it will need to remain up / heading up for 7 days to signal a turn that would last 1-2 months.
If the DJIA falls tomorrow 400 pts it will reverse down.
The SPX SMAC, which turned up last week, continues to rise.
This indicator has an average error rate of around 15% of picking turns over many years. It should for risk mitigation be read in conjunction with EW count and other technical methods if used for trading and taking out a counter-trend position.
On your chart 3 above you need to consider if the teal colored A B covering the small blue ABC decline is really a neg 12345. Thereby making teal B a neg wave 1 and the move since early Jan an abc forming neg seq wave 2.
ReplyDeleteYoull see a clearer pic of this on DJIA.
Correction - in last weeks posts I said my Special Moving Average Calculator (SMAC) for SPX turned up on 26 January 2023, however I had to fix formula in a few lines of data cells in the spreadsheet a few days ago, and noticed today its adjusted the turn up date back to 2 days to 24 January (with the indicator curve making low the day before on 23 Jan). There wasnt much price change in the index over those 2 days anyway.
ReplyDeleteAs of today's THURS 2 Feb 2023 Close SPX is up about 150 pts since 24 Jan (so it picked the turn up) the indicator has risen 7 trading days up and data stream says it would need a very large fall to turn it down, so based on past performance of this SMAC, SPX is indicating 85% probability of a 1-2 month advance of prob 3000 pts (noting that 1.5 in 10 turns signals are errors).
However the EW count looks doubtful of such an advance given the main wave position. (Mkt is also just on 6 years since the 2016 low).
So we'll see which turns out to be right.
If the SMAC reverses on a mkt fall over the next few trading sessions a turn down signal may be triggered and will be more powerful.
The DJIA one turned up on 30 Jan but has not been up for 7 days yet (only 4) to give better confidence to such a 1-2 month move.
Sorry - err - 7 years since the 2016 low.
DeleteErr- in double checking the SMAC spreadsheet again I noticed 1 cell calculation out and as result after fixing it the SPX turn up date is now back to 26 January 2023. Making it 6 trading days up as of 2 Feb close, not 7.
ReplyDeleteThe comment about 85% turn probability possibly still applies tho.
7 days would have been better.
There's 2600 lines of cells in it. Data & calcs.
I like to be accurate with these things.
MTU, do you find that any of your std moving averages (eg 200 day), RSI things. etc... you use work in predicting turns ?
ReplyDeleteIve never really looked at them in detail - but they seem to only tell you when the general momentum has weakened or strengthened and well after a main top or bottom has passed.
In many instances this SMAC I was given gives the turn signal either just before, at, or within 3-10 days after a turn then trend advance or decline wave that last 1-2-3 mths follows. And even when its late, the price at turn signal date is usually still within a double or triple bottom/top pattern so you dont miss the boat by much if at all. (This is in the 85% of times it does give the correct turn signal).
My impression is that no static MA works for all period (as it shouldn't be expected to). Dynamic MA (dynamic windows) looks promising.
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