S&P500 Index – Update

OK, recent price action has forced me to update the commentary on the S&P500.

A potential TOP could be in, it is not certain (we need more price action), price taking out the Minor swing low is a potential game changer.  BUT, it ALL depends upon how price action forms and reacts  during the next few weeks.

Look at the chart below (I’ve used this in the last update), there is an equal chance that all is happening is a simple or complex correction from the highs OR that we are within the early stages of a bear market.  I know some traders are saying that’s it the tops in, but they were also saying that on MOST highs in the market!  Like I’ve said in the past, you throw enough predictions and one will hit, it does not mean you’re smart!

1737.92 is now the key and critical level, for me until key lows are taken out such as 1737.92 the odds still favour the upside, but as I’ve mentioned this could be the start of a major downtrend – it is just too early to know for sure.

When we trade, we are guessing, we now need to watch the bounces that will occur, if they are strong then I’d expect price to head higher to sideways, if the bounces are weak in terms of number of bars and price % then the downside might be here – keep an eye on the bounces as they will be critical.

Look at the “bounce” from the 5th Feb 2014 = STRONG

1

You could refine the quality of the analysis in the chart about by placing retracement levels, but I find it simpler to just watch price action and see what it actually does, because that is the most important indicator of all – PRICE action.

Remember I am looking for a +20% correction in the markets this year, I had a Time Cycle date of 29th March 2014 – the HIGH so far came in only 5 days later – the Time Cycle is still VALID.

If we are still within a Deflationary Depression (as I think we are) then 6 year Bull markets just do not happen, they NEVER have in 200+ years of stock market history.  Obviously if we are NOT in a DD then the market is perfectly fine with a 6 year bull market.

 

 

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