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Time for an update on the general outlook for the S&P 500.

In my last report on 19 September the market was approaching an important test of strength. It had just traded above 2500 for the first time and was approaching an initial projection of the new T structure for a short term peak on 21 September. With the market showing significant strength it was a good time to ask the questions: Is there more? or will the round number target present a problem moving forward? I made the point that what happened after that projected peak would be very telling indeed, because the market was showing support for a much larger T structure and consequently significantly higher prices.

The answer came quickly, a few days of weakness which did not trigger a 'cover signal' and on 25 September a brief spike down to 2488 was all that was required to trigger a continuation Buy Signal that was itself confirmed by a movement above the slight declining resistance from that previous high, and the result was a rapid advance straight to 2550. This move without a doubt had many players incorrectly positioned for a decline below 2500 into an October low.

And so, what's next? Are we there yet?

The market breezed through the first layer of potential resistance on a rising line from the 15 March peak but stalled at the parrallel rising line from the 1 March peak, and there it has remained for the past week, drifting slightly higher.

Firstly, this T structure is now already larger than its initial peak to low and so it is now drawing strength from the June declines, and this allows for several projections of peaks in the coming weeks, as well as the possibility of further projections higher afterwards.

The market has rapidly moved higher with significant strength and has signalled that the current T structure is large – potentially drawing strength from each of the declines earlier this year. This is because the oscillator has moved upwards through the very long cash build up line going right back to the previous oscillator high at 72 on 15 november 2016. If you want an explanation for a melt up in stocks this is it.

Secondly, the T volume oscillator has just dropped below the zero line. This in itself is not a sell signal but indicates a weakening of breadth and therefore a level of profit-taking is going on in the backgound. Not particularly surprising but well worth keeping an eye upon as this is also a characteristic of a distribution period prior to a possible decline – not necessarily a severe one. Because of this I am expecting to see a sideways market develop with probes to the downside as well as to the upside whilst the market establishes an upper range prior to the next move. Up or down.

If we do get a decline at one of the next projected peaks, then we watch the oscillator for bullish divergence and for a movement upwards through the short cash build up line of declining lows in the oscillator – the signature of the next small T structure.

If we do not get a decline but rather a continued sideways movement (such as July/August 2016 or December 2016-January 2017), then we continue to monitor price and oscillator carefully for signs that the exit will be either upwards or downwards.

Zooming out to the weekly chart, we can see that the market is rising well within a strongly defined channel and is perhaps playing catch up on some of the lost time in late 2015 and early 2016 after the market lost its rising trajectory in May 2015. That rising trajectory just might be the current target and if it was acheived we could be looking at 2700 by year end. That may of course be a little too much to ask for but if the current T structure was to peak out at the upper edge of the pink channel that would be in the region of 2660. Just food for thought.

The super long range T structure now looks complete but with the possibility that it also projects into December. Each of the important declines that start above the final price low project subsequent peaks, and because the most recent projections had little or no effect it would seem that the new recent structure is now more dominant.

The rapid movement upwards through the 2 rising lines from the March and September 2000 peaks adds to the strongly bullish picture. Those previous lows in the 2320s and 2420s are now significant moving forward. Look out for those levels if they are re-visited in the future.

We continue to watch the oscillators for clues, but allow price to be the leading indicator.

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Be prepared for what is coming next:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

Time for an update on the S&P 500.

An exciting start to the Fall and the S&Ps are now at 2500.

Is there more? or will the round number target present a problem moving forward?

Firstly, an interesting development in the T volume oscillator.

On the 22 August the market made a Short Term Buy Signal and defined a small T structure by cutting upwards through the descending cash-build up line of lower highs in the oscillator. After the initial hesitation related to the North Korean missile tests, another peak was produced on 1 September – slightly later than my original estimation for an important peak in the week of 25 August.

One day of weakness as traders came back from the Labour day holiday was all that was required, and in the process a re-test of strong suppport occurred. As soon as worries about missiles and hurricanes were put to one side the market moved quickly to new all time highs and here we are at 2500.

Notice now that since 11 September, the T volume oscillator is making new highs relative to all previous highs this year, and it is therefore cutting upwards through a very long cashbuild up line that takes us back to the December peaks in the oscillator. Notice also the classic 'W' pattern in the oscillator with bullish divergence – a telltale T Theory buy signal.

The market is telling us something – that the August lows were an important successful test, and that the market has significant potential for an advance that could take us much higher. The market is potentially defining a much larger T structure at the recent lows and could draw strength from each of the previous peaks this year.

Initial projections for the current T structure are for later this week, and we may experience some strong selling because the super large double bottom structure of 2016 also projects another high – perhaps short term – for later this week.

How the market responds at this projected peak will be very telling moving forward.

The weekly chart above shows the full potential of the long range Double Bottom structure of early 2016 with the possibility of a an extension into December. My initial thought was that the projection for an early August high – projected from August 2014 – would be an important peak prior to an extensive bearish phase (see Trump Vs Kim ) but the market appears to have another idea:

– the super large T structure is complete, and we now have a new structure centred on the recent August lows with potential into the winter – higher highs and higher lows, and /or

– the super large structure continues to draw strength from the March and April 2014 declines and this also projects highs in early and late December 2017

But the alternative – which I think is looking less likely due to the reasons above – is that we haven't seen the drop, yet:

– the recent bullish move is a blow-off top extension to the super large T structure and the market is about to turn down into a more defined low in October.

We continue to watch the oscillators for clues, but allow price to be the leading indicator.

Be prepared for what is coming next:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

There are two problems for our species' survival – nuclear war and environmental catastrophe – and we're hurtling towards them. Knowingly.

– Noam Chomsky

Time for an update on the S&P 500.

In my last report I posed the question – was it time to rollover and die, or was it time for a summer rally? The answer came quickly and on 12 July the market gapped up above descending resistance on a clear Buy signal.

A good summer rally was had, and after several momentum and breadth warnings we had the exhaustion move to 2492 on the 8 August. I had been warning my readers of an expected peak in the early August timeframe but then someone mentioned missiles and we had the quick panic selloff last week.

As you can see several of the recent T structures pointed to a possible August peak including the very large Double Bottom structure centred inbetween the 2 major lows of early 2016. (Top in purple)

The panic took the market straight down to the important 55 day exponential moving average, and this is an important inflection point and has been the site of many important recent lows.

The subsequent bounce has made a small T which looks to be confirmed today and projects a high in late August.

Interestingly the 2nd low of the large Double Bottom T structure projects a series of Echo lows (marked in pale blue) and, if correct, this suggests another important low coming up also in the late August timeframe.

The weekly chart above shows the full potential range of the long range Double Bottom structure of early 2016. It now looks nearly complete. As you can see the market has been tackling the long term resistance lines that I have drawn from the March and September 2000 tops. I believe that because the market has moved upwards through these lines it has set up a significant move higher. I suspect that it may be similar to the June 2014 breakthrough, which wasn't straight up but followed a process of re-testing the previous significant low and building a platform. Perhaps 2350 and/or 2320-30 will become significant at future lows prior to the next major advance?

In the meantime it looks like the next important peak will be in the week of 25 August, with perhaps another significant peak in the week of 22 September. How much of a pullback is required first, and whether to expect higher or lower highs is unclear, and is dependent upon what happens next.

Beyond this it seems likely that we will need to see some type of corrective action that should set up another large T structure. Notice the momentum slowing on the oscillator has previously led to some significant corrections.

Perhaps Trump vs Kim after all.

Be prepared for what is coming next:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched C-beams glitter in the dark near the Tannhäuser Gate. All those moments will be lost in time, like tears in rain. Time to die.

– Bladerunner, 1982. Dir. Ridley Scott

Time for an update on the S&P 500.

With the market's recent visit to 2450 and some additional volatility entering the scene, the question arises: is it time for the market to rollover, and time to die?

Unfortunately the crystal ball is rather cloudy, but I think it is interesting to look at the various causes and effects, and weigh up the possibilities.

Each of the major lows has a T structure, and we can see that these structures drawn from previous highs to lows make projections in time that produce highs. The oscillator reveals the breadth or force of buying power behind the market's moves, and reveals some of the important turning points.

What we can see at the moment is that the very long range T structure (purple) associated with the January-February 2016 Double bottom is having a downward endgame effect. So too is the T structure associated with the Election low – I have drawn extensions of this structure back to the previous oscillator high (+148), and it looks like the most recent all time high coincides with this. And there may be another one in the next few days.

The pale blue structure associated with the second low of the major double bottom projects Echo lows, and interestingly this includes last week's visit to 2406, which occurred on an important rising line from the Election low, and at the important pivot line – the 55 exponential moving average.

The behaviour of the oscillator in recent months – breaking up through the descending cash-build up lines, albeit briefly – is still supportative of the 2 most recent T Structures with possible projections into August.

So – imminent collapse, or summer rally? Perhaps a bit of both. Violation of that important rising line and the 55 ema would most probably set up a short trip lower, where we most probably will find some renewed interest in pushing the market higher.

The weekly chart above shows the full potential range of the long range Double Bottom structure of early 2016. As you can see the market has been tackling the long term resistance lines that I have drawn from the March and September 2000 tops. I believe that when the market moves upwards through these lines it will set up a significant move higher. I suspect that it may be similar to the June 2014 breakthrough, which wasn't straight up but a process of re-testing the previous significant low and building a platform. Perhaps 2320-30 will become significant at future lows prior to the next major advance?

In the meantime it looks like the next important peak will be in the week of 4 August, with perhaps a more significant peak in the week of 25 August. How much of a pullback is required first, and whether to expect higher or lower highs is unclear, and is dependent upon what happens next.

Be prepared for what is coming next:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

Time for an update on the S&P 500.

In my last report, I discussed the new T structure as the market popped up on the 'certainty' of the French Election and proceeded to attack the 2400 level. At that time it seemed likely that a pullback might occur due to the strong resistance at 2400 and the prescence of a large gap.

The one day sell-off last week closed that gap, price made a quick sell signal and headed for a long term rising trend line that originates at the Election low. That support line was never quite reached as the market headed straight back up to the highs generating a new Buy signal in the process, and a new small T.

During this time I have also reflected upon the T structures that have been created in March and April due to the series of oscillator and price lows. It is complex – there are several higher lows in the oscillator lows and 2 similar price lows, followed by the recent higher low.

The first oscillator low & price of 9 March creates a very small simple T with the lower high.

The second oscillator low of 21 March which drops into the lower (opening) price low of 27 March sets up a collapsing T structure, and a shadow T structure centred on the price low.

The third oscillator & price low of 13 April sets up a double bottom, and this provides 2 possible T structures – a double bottom DB T structure centred inbetween the 2 lows and a second(ary) DB T structure centred on the final low.

The fourth oscillator & price low of 17 May creates a simple T projecting into 8 June.

Usually the Double bottom T structure would be more dominant and the secondary structure at the final low would project lows at its final arms rather than highs.

Interestingly the DB T structure and the Secondary DB T Structure have both recently produced highs at 9 and 15 May respectively, and this has led me to believe that the Secondary DB T Structure is actually the primary structure. This may be because the price low of 27 March was not a low that was sold into but rather that the market opened down significantly and rallied from that price.

And so the question arises, what's next?

Late last week we reached the end of a major arm of the Secondary DB T structure and the first arm of the new T structure, and so a pause or pullback here could be expected. However, both of these structures also project highs into the 6-9 June period.

Looking at the super large T structure centred on the early 2016 double bottom we can see that there is the possibility of a high being projected from the 19 September 2014 peak – 342 days from high to low and back to high projects 8-9 June 2017. This is the purple arms at the top of the first chart.

Notice that the gray T structure drawn at the final low of that double bottom produces a series of Echo lows.

Be prepared for what is coming next:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

Time for an update on the S&P 500.

In my last report, I mused upon the question: is it about to get unpleasant, as the market squeezed, gently, downwards.

I pointed out that the next Echo low projected by the extremely long range T structure associated with the early 2016 double bottom was expected to be around the 19 – 22 April.

At the time the market was triangulating and displaying bullish divergence in the oscillator, whilst at the same time respecting the defined downward trend channel.

Prior to the recent French Election, the market displayed volatility warnings not disimilar to those prior to Brexit and the US Election.

A few votes later and we have a huge volatility crush and markets open up well above the previously defined channel. Markets held firm and quickly rallied above the initial pop and headed for the 2400 level.

The result:

An S/T (short term) Buy Signal and a strong move of the (Magic) T Volume oscillator up through the long cash build up line marked in green.
This in turn produces a new large T structure drawing power from the cash-build up line and projecting strength forward in time equal to the amount of time that the market has been declining (as described by the oscillator). Each wave down in the oscillator has the potential for producing a wave upwards equal in time.
Arms of this new T structure project forward into May and potentially into June.

The caveat:

With such a rapid move back towards the 2400 level, there is always the possibility of failure, and it is true that the market has recently been in a mode of selling the strength and buying weakness. It is entirely possible that we see a short-term double top, and a pullback here. If this occurs, it will require a new low in price and oscillator to significantly change the bullish outlook.

Zooming out to my weekly chart, the super large T structure centred on the early 2016 double bottom still seems alive and well. There isn't an obvious projection for another major peak until the week of 09 June, as the T structure still seems to be drawing power from the mid 2014 declines – from prices above those of the 2016 lows.

However we should acknowledge the strong 'resistance' apparent at the current highs due to the long term gann projections from the 2000 March and September tops. Movement above these levels will open up the possibility of considerably higher prices.

The market reveals its intentions one day at a time and reserves the right to change its mind on a moments notice.

We watch the oscillator for clues, but we use price as the leading indicator.

Be prepared for what is coming next.

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, please Sign up for daily Alerts & Observations – includes access to Members Area and Explanatory Notes.

Since the 01 March high in the S&Ps, we have seen a series of lower highs, and lower lows with strong bounces that have been sold into – marking out a defined downward channel.

So far the selling has been relatively mild, in comparison to previous corrective periods, but more and more it seems that the market is at an inflection point, and the obvious question is: is about to get unpleasant?

Lets have a look at the bigger picture:

The market has been trying to hold onto some strong rising support lines, whilst at the same time acknowledging a descending resistance line and this produces a triangulation. Triangulations are squeezes – direction uncertain.

We could make comparisons with the September 16 period, or alternatively with the May 16 period. It seems quite usual for the market to test a descending resistance line 3 or 4 times before making a firm decision whether to break it or rollover.

The very large T structure which still seems to be dominant – from the January-February 2016 double bottom projected a series of price highs from right back to the November and December 2014 highs to the recent highs. Before the November 2014 highs, the previous low was at a comparative level to the 2016 lows and so this T structure should be complete now. This could well explain the current lack of buying power in the market and could certainly produce some lower lows in the near future, as the market looks to re-charge itself.

The same T structure also projects an Echo low in the April 19-22 period, which remains to be seen.

We can also see that the buying surge at the Election low has produced a long line of shallow lower highs in the oscillator which we can describe as a cash-build up line, marked in green. When we get a buying surge that cuts through this line, we can draw the next large T structure. Of course, we may need to go down first in order to get the bounce required to break up through this cash build up.

We watch the oscillator for clues, but we use price as the leading indicator.

Be prepared for what is coming next.

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, please Sign up for daily Alerts & Observations – includes access to Members Area and Explanatory Notes.