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Do You Know When The S&P500 Will Finally Top?

“There is no way you can predict the market.”

“The market is purely random, so trying to figure it out is nothing more than guesswork.”

“No one can tell the future.”

Yes, I have heard it all.  Day after day, and week after week I provide my analysis to tens of thousands to as many as hundreds of thousands of readers, and those who have no experience with my analysis over time have repeated the same statements above, but in varying ways. 

However, they view the market as either being black or white.  Yet, life is not black or white, but, rather, is filled with grey.  And, so is the market.  So, one must approach the market from a non-linear perspective, rather than one based upon rigidity. 

In the end, because the market is non-linear in nature, there is never going to be anyone who will ever be able to identify turns in the market 100% of the time.  And, that clearly includes me.  But, those following our work over the long term have recognize that we have been within the 70% accuracy realm. 

In fact, since we started our The Market Pinball Wizard service here at Seeking Alpha almost two months ago, we have become the 9th largest service out of the 148 service offerings, and our members have noted:

“. . . his calls are accurate and his calls are correct most of the time. He will show you the market as it is and how it highly probable will act in the future”

“His analysis was always original, consistent, trenchant, and mostly spot-on --- By my own ballpark, he's more than 80% correct, an enviable track record that I'd never seen in any other analyst.”

“I have been astounded at the clarity and accountability of his calls and predictions, and mostly, what makes the money - how generally accurate or on the higher side of consistent probability he seemed to be, i.e, like 70-80% 'getting directions and direction changes right". I mean, I was astonished.”

“I've never seen anything better than this.”

Seeking Alpha Author Research


So, let’s take a look at the S&P500 from a non-linear perspective.

In December of 2015, as I was providing my expectations for 2016, I suggested that the market will likely see a drop from the 2100SPX region down to the 1800 region, which will likely set up a rally to a minimum 2300SPX region in 2016, followed by continuation to the 2537-2611 region into 2017.

Well, in early January of 2016, the market proceeded to drop down to the 1800 region into February of that year, and began a rally which struck a high of 2277.53 in mid-December.  And, it took us another 26 days into the following January until we were able to strike the 2300 level.  So, clearly, it was not a perfect market call.  But, as I noted, no one can be perfect in the market.

Moreover, take a step back and consider that in July of 2016, we noted that we expected the market to top out below 2192, and drop down towards the 2030-80SPX support region, which will set up a rally into the end of the year towards 2300SPX.  Over the next few months, the market did spike as high as 2193SPX, and then dropped down to the 2083SPX level.  Again, the call was not exactly perfect, as the market spiked our resistance by a point, and held support 3 points over our 2080SPX level.  However, consider the fact that the futures dropped the night of the election and struck the relative 2030SPX level before it began the rally towards 2300SPX.  

Additionally, take note that this analysis was not contingent upon who won the election.   I had stressed that NO MATTER WHO WON THE ELECTION, my analysis stood as is, and it was my clear expectation that the market was setting up to run to the 2500SPX region.  Trump won the election and the market rallied toward our targets, despite the common expectation to the contrary.  The funny thing is that we were trading the night of the election, and as we were hitting the 2030 region, I noted to my members in my trading room “don’t be surprised if we open in the morning right where we closed.”  And, that is exactly what happened.

As we moved into 2017, my expectation was that we were going to attack the 2500SPX region, which was an additional 200+ points from the point we opened the year.  In fact, I noted that we will not see any real deep pullback in the market until we get to the 2500SPX region.

As we moved into mid-July, I noted that I believe we can see a market pullback within 3 weeks, with a target date around August 9th.  My expectation was that the market was going to top between the 2487-2500SPX region, and then drop down to the 2300-2360SPX region, which will set up the next rally to 2600+.  Again, my expectations were not perfect.  While the market struck 2491SPX mid-day on August 8th, and proceeded to drop down to the 2417SPX region a little less than two weeks later, it did not fulfill my full expectation on the downside.

But, for those who traded those two weeks with us, they know that we caught almost all the twists and turns during that period, while many were getting whipsawed. Coming into the last week of August, we were expecting the market to drop down to support within the 2425-2430SPX region, and then rally back towards the 2465-2475 region, before it set up to drop back down to the 2400SPX region. As we now know, the market dropped hard and bottomed early that week at 2428SPX, and then rallied back to 2480SPX. When the market topped out at 2480 on September 1st, our expectation was that we would see a drop down to the 2400SPX region next.

While the market dropped 34 points from that level within the next trading day, when it came back up through 2460SPX I posted to all our members that we now have opened the door to the 2500-2510SPX region, rather than an immediate continuation down to the 2400SPX region. The main reason was that when the market did not follow through on our Fibonacci Pinball set up towards 2400SPX and came back up through the 2460SPX region, the market provided us with a strong warning that the downside follow through was much less likely.

As we stand today, the market is still fighting with the resistance region I posted when we came through the 2460SPX region.

So, this leaves us with the question posed in the title of this article.  Currently, I am looking for the market to move to the 2530SPX region.  And, believe it or not, it CAN provide a top which can turn us back down to the 2350-2400SPX region.  Much will depend on how the market reacts over the coming week, so I will be watching the market carefully to determine if we will be topping next week, or if the market is going to want to extend up towards the 2600SPX region into the end of the year.

So, come join us in The Market Pinball Wizard to follow the market as it develops during the coming week, as we get more clues regarding where the market intends to top out for 2017.