The S&P 500 index ended the week near support at the lower boundary of the uptrend from October 2011. However, the March employment data was much worse than consensus expectations, causing a 15-point decline in S&P 500 futures on Friday. For several weeks, we have noted that the rally from October is extremely overbought and awaiting a catalyst to set in motion a potentially violent overbought correction. It is highly likely that the disappointing March employment data has provided the necessary catalyst. Although market conditions can change between now and Monday, the sharp decline in stock futures suggests that the S&P 500 index will likely close sharply lower during the next session. A 15-point drop would result in a confirmed break below uptrend support and forecast a quick move down to congestion support in the 1,345 area.
The decline this week nearly generated a cycle high signal, suggesting that the latest Intermediate-Term Cycle High (ITCH) likely formed last week. A close below current levels next week would confirm that the corrective phase of the intermediate-term cycle from October 2011 is in progress. Given the extremely overbought state of the rally from October, it is likely that the corrective phase will have an equally violent character heading into the next Intermediate-Term Cycle Low (ITCL) in late April or early May.
There is no meaningful support on the weekly chart until the congestion zone in the 1,340 area, so it is highly likely that the index will return to that level during the corrective phase of the current cycle.
Now that the latest intermediate-term high is almost certainly in place, it will be important to monitor market behavior for signs of a cyclical top. At a current duration of 37 months, the cyclical uptrend from 2009 is four months longer than the average bull market during a secular downtrend, so the uptrend could terminate at any time.
- English (UK)
- English (India)
- English (Canada)
- English (Australia)
- English (South Africa)
- English (Philippines)
- English (Nigeria)
- Deutsch
- Español (España)
- Español (México)
- Français
- Italiano
- Nederlands
- Português (Portugal)
- Polski
- Português (Brasil)
- Русский
- Türkçe
- العربية
- Ελληνικά
- Svenska
- Suomi
- עברית
- 日本語
- 한국어
- 简体中文
- 繁體中文
- Bahasa Indonesia
- Bahasa Melayu
- ไทย
- Tiếng Việt
- हिंदी
Stock Market Intermediate-Term High Likely In Place
Published 04/09/2012, 01:37 AM
Updated 07/09/2023, 06:31 AM
Stock Market Intermediate-Term High Likely In Place
Latest comments
Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.