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S&P 500 Month End Review

by David G. Hawkins

Long Term - Monthly Bars Chart

The first chart here is of the long term, the monthly bars chart. We see that price poked significantly above the 76.4% Fibonacci level, and closed still above it. This bodes well for a continuation of this long term uptrend. Above where we are now, the next resistance is a relatively minor one, the gray line marking the 2008 high at 1440. After that, there's no clear resistance before getting to the 2007 high of 1527.

Short Term - Daily Bars Chart

The second chart here is of the short term, the daily bars chart. (I'm not going to review the weekly bars chart this time since we are mid-week. I'll do that one after the Friday close of March 16.) See my last post for an in depth discussion of the TopFinder on this chart. We see now that the TopFinder is about 92% complete, nearing its projected end at the dashed vertical line. Last time I said,
"The blue trendline is an extrapolation of the linear regression fit to this trend, and at the projected end of the TopFinder, its level is 1400. This is NOT a prediction that price will go to 1400 at the TopFinder's end, since price usually starts to roll off considerably as it approaches the end."
And indeed we see that price action is now sagging below the extrapolated trend line. Last time I also said,
"Once the current short consolidation of the past week ends and price moves up again, I'll launch S4 from the low of this consolidation. Typically, an accelerated uptrend spawns S curves thru S4 before it ends."
And as you see now, I have launched S4. The four-fold hierarchy of S curves is now complete, and we anticipate the end of this trend in a week or so. After that, we expect at least a brief consolidation before the market decides what to do next.
This TopFinder was fitted to the price at the lowest arrow labeled "Fit". But notice that the curve is close to fitting nicely also at the other two arrows, Feb. 16 and 27; one is a little over and the other a little under. This gives us more confidence in this TopFinder.