S&P 500 “Walking-Up” 1 X 1 Angle
Despite the modest giveback over the last couple of trading sessions, my bullish outlook remains undeterred. Throughout this bull market, I have observed that the S&P 500 has traded in a series of parallel 1 X 1 channels. This latest move has pushed northbound to tag the upper pattern boundary of the 1 X 1 depicted on my chart in cyan blue. But I still don’t look for any significant stall-out in the rally just yet. Any give-back from here is likely to be rather muted and certainly a gift for the late cycle bulls. The next major price octave at 2,125.00 is just a hair away and, while we have yet to reach that level, I suspect we will be there very shortly.
I am focused on the time window surrounding the March 12, 2015 time period as the next likely trading cycle high point. Curiously, that will coincide with 15 years virtually to the day from the 10-Mar-2000 high in the NASDAQ. A couple months ago I held the possibility that a March 2015 high might well mark the terminal point in this bull market; however, I now view any March high as a precursor to the final bull market peak – which I am now tentatively targeting for the May 11, 2015 time period. I still have further work to corroborate that; but it’s looking quite compelling now.
As with the S&P 500, the Dow Jones Industrial Average has pushed higher to tag the upper pattern boundary of its 1 X 1 angular channel. The next price octave above 17,500 is 18,125. We’re there. Price is presently sandwiched in between the upper 1 X 1 and that price octave. Something has to give – and I believe the prevailing winds from the south are destined to push this market still higher. The subsequent price octave higher is at 18,750 and could be more-formidable resistance – assuming we can reach that level by the next trading cycle high I have identified for the March 12 time period. The NAZ is fast-approaching its March 2000 high (see chart).
Treasury Bonds / Yield
The daily TYX chart above shows the sharp rebound off the recent low at 2.23. Price on the TYX chart has pushed back above its 20 day moving average – now positive - and is now on track to push higher over the intermediate term.
Lethargic, sloppy price action on the metals charts. I still look for some kind of attempt at a snap-back to the 1,250 level – a major price octave for the gold market. Once that occurs we may have a decent re-entry point on the short side. For now I continue to advise a sidelined position (NEUTRAL).
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