Stock Market Technical Test (Technical Analysis) (SPX)

From a elementary perspective, the debt ceiling shall be a monetary and psychological burden on the inventory market till the political and financial self-harm ends, however for now spending can proceed because of the Treasury money steadiness (TCB) and the “extraordinary” Measures’ out there for the treasury.

On this article, we take a look at the inventory market from a strictly technical perspective.

Within the very long run (years and many years)the SPX continues to trip the Raff’s mid-slope line up because it has many occasions within the final 30 years With out falling right into a “full entrance” bear market (blue oval beneath). The favored perception {that a} 20% decline defines a bear market is unfair and never technically supported; A breakout beneath the Raff decrease regression line (pink ovals beneath) is required for technical affirmation of a bear market.

A better look reveals that the SPX is above the 40- and 8-month shifting averages, and the technicians are recovering from the oversold ranges.

Over the previous 100 years, the inventory market has displayed a “step-like” sample of buying and selling vary intervals (steps, shaded in purple) lasting about 12 years, interspersed with spikes (highs) lasting about 20 years. Proper now, we’re 9 years into a type of main restoration intervals, which signifies that we’re simply Halfway With this main bull market (chart beneath):

As we strategy the final 9 years, we will see that there’s a fractal Recurring “step-like” sample, the place buying and selling vary steps final ~1 12 months and staggered highs final 2-3 years. Based on this sample, the SPX index is rising away from the underside of the buying and selling vary and will escape to new highs in late 2023 (chart beneath).

I now change to a shorter date vary (days and weeks), The Weekly SPX broke above the Raff’s higher line and is now dealing with resistance on the 50-week shifting common, 4038. We count on some hesitation earlier than it breaks above this resistance (chart beneath).

Every day, the SPX has been pushed again via resistance on the 200-day shifting common, however there’s double assist down at 3920 (38% Fibonacci retracement and the 50-day shifting common) after which once more at 3757 (23.6). % Fibonacci retracement). Different applied sciences are at a premium, however they’ll keep that approach for fairly a while with out inflicting issues for SPX. Some impartial to weak motion is anticipated within the inventory market over the subsequent week or two (chart beneath).

Worth: The technical ratio is bullish (in relation to the SPX), however technical indicators have reached prolonged ranges, which implies we count on quite a few SPX weak point days (chart beneath).

The push has crossed the highest space, because it did in Could 2020. This doesn’t imply that the SPX cannot go larger, nevertheless it does point out a “break” as we noticed in June of 2020 earlier than persevering with larger.

The IT quantity oscillator has crossed the RSI above 70 which implies that the probabilities of a pullback within the SPX have elevated, though there’s room for it to rise additional (beneath chart).

The McClellan consolidation RSI is near the overbought degree at 70. Because of this the SPX is near a short-term pullback (chart beneath).

Briefly: the long-term major development remains to be bullish. The SPX is bouncing off the underside of the fractal buying and selling vary and is prone to escape to new highs earlier than the top of the 12 months. Over the subsequent two weeks, the market is anticipated to weaken (however not collapse) and this could present a possibility so as to add lengthy positions in large-scale ETFs resembling SPY, QQQ, and IWM.