Current S&P 500 model indication:
overbought - (since 2009-09-09)
cautiously bullish - (since 2009-10-09)
notes - watching for a possible 5% or so decline to materialize in the index over 10 trading days out from october 16.
(see my basic geodesic concepts post for a general model description)
i did not post any charts for the week ending on 2009-10-09. the results are included in this one. coincidently the geodesic coordinates reversed direction on 2009-10-09 as indicated by the arrow in the diagram below. motion along the geodesic path in this direction always indicates a positive upward bias in the S&P 500. remember, the geodesic is 2-D curve in time so anytime the arrow has a negatively-sloped theta directional component, the model indicates a positive upward bias. a positively-sloped theta directional component indicates a downward bias in the S&P 500. note, the current plot shows an increase in velocity of motion along the geodesic consistent with the quick rise in the S&P 500 over the last 7 or so trading days despite selling off the last 2 trading days.
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the chart below looks at the difference between the rates of change in angular and path velocity. > 0 indicates a positive upward bias in the S&P 500 and < 0 indicates a downward bias. the yellow trace is the 12 DMA. the yellow trace therefore responds more slowly to changes and is a longer term index indicator than above. the yellow trace almost dipped below zero when it looked like the market had recently sold-off but then recovered. the pattern is very similar in the end of may when the trace touched zero, went up for a bit then actually crossing zero & staying below zero for about the last 2 weeks in june & the first 2 weeks in july. watch for the yellow trace to peek below the last rise no higher than a y-value of 0.007.
Click to enlarge
dislosures: in my SH-SPY pairs trade, i am 66% SH & 34% SPY. my long holdings are also counter-weighted by bond ETFs listed in my tags. operating with 15% cash. use of the information contained in my blog is at your own risk. the data if for personal information purposes only and is not to be considered as financial advice.