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:
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