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S&P 500 - Month End Update

 

 

 

 

by David G. Hawkins

This is my month end review of the S&P 500, where I update the daily bar, weekly bar and monthly bar charts.  I updated the daily and weekly bar charts in my mid month review on April 17th.

Short Term – Daily Bars Chart

The first chart here is the daily bars chart.  But first, please scroll down and see my April 17th chart & commentary.  There, since price bounced smartly off S1, I expected strong upward movement to follow, at least for several days.  However, on the very next day, Monday April 18th, Standard & Poors dropped a bomb on the market by downgrading U. S. debt with a negative outlook.  The stock market reacted sharply downward.  What’s fascinating to notice here on the updated chart is that price went down to the curve I’ve been calling “S4 cal”, which I’ve had on this chart for several moths, and bounced right up from it.  The low of that day, 1297.4, and the level of the curve, 1295.2, are so close, differing by only 0.8, that this support and bounce cannot be just happenstance; rather it’s a beautiful illustration of the power of the Midas method.

After the negativity of that Monday got absorbed by the market, prices went on to do what I had expected they were going to do, which is to move smartly up.  Indeed, this new uptrend has been almost a straight line.  Eventually, there will be some kind of pullback, but at this point there’s no indication of one.

Intermediate Term – Weekly Bars Chart

The second chart here is the update of the weekly bars chart.  We see that in the past two weeks, price has broken above R1, above the high of the Feb. 18th market peak, and has just poked and closed above the Fibonacci retracement level that we’ve been watching for quite some time.  So, this shows that the uptrend that started late last summer is forging ahead.  The TopFinder shows that this trend is now about 49% done in terms of cumulative volume.

Long Term – Monthly Bars Chart

The third chart here is the update of the monthly bars chart that I last showed here in my April 4th post.  On this update, I’ve added a new TopFinder, TF4, started from last summer’s beginning of the current uptrend.  TF4 joins the three other TopFinders and one BottomFinder shown on this chart, all of which beautifully nailed the ends of the accelerated trends they were following.  I’ve changed the display to EquiVolume from CandleVolume to more clearly illustrate the points to which these TFs and BF have been fit, shown by the small arrows.  My point here is that TopFinders and a BottomFinder have been very successful on this long term chart, which leads us to expect that this current unfinished TF4 will be equally successful.  TF4 is now 68% complete, with the horizontal location of its completion projected to occur at the dashed vertical purple line.   If average monthly trading volume continues as it has been, completion will come in three to four months from now.

If you again look at the weekly bars chart, the second chart here, you’ll see that its TopFinder is only 49% done, also starting last summer, which projects a completion many more months from now than the TF4 on the monthly bars chart does.  These would seem to be contradictory projections.  Actually, these two TFs don’t address exactly the same situation.  The monthly one starts from the low of last summer, which was in July, but the weekly one starts from the end of August.  The accelerated uptrend on the weekly bars chart is not the same uptrend that’s displaying on the monthly bars chart.  Also, I’ve found that a TF which is less than 50% done is not as reliable as one which is more mature.  Given the track record of TFs and BF on the monthly bars chart, I’m looking at that one to be the more reliable.

^GSPCdailyShow

^GSPCwklyShow

^GSPCmnthlyShow

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