The market didn't give us anything but light volume information over the Holiday week, so there's just not a whole lot new going on.
The S&P 500 keeps grinding up, bounded by its 10-week exponential moving average (green line on the chart). A decisive breach of this important line -- currently at SPX 1042 -- will be the sign that something different is going on. It will actually be important to see a weekly close below this line before jumping to too many conclusions about downside scenarios.
The SPX continues to hammer away at the crucial 1060 level, which is an important harmonic retracement level for the big bear market. This Monday morning it looks like we'll see another stab over this level, with the futures solidly up in pre-market trading. Another spike over 1060 that collapses back below it would be a head-scratcher, for sure, as the market doesn't often repeat itself so much. But there has been a lot of work done to get back to this level, and now there is little left in the tank to push prices up and over. My 150 fractal dimension chart is showing a reading of 33, which is where trends usually stop cold.
So this "fakeout-breakout" scenario remains the likeliest outcome, yet again. If you're a nimble-type trader, you could even try a short as the SPX comes back down through 1060, after having been above it and failed to hold.
Sentiment-wise, the market looks ripe to cycle into a short-term decline phase, as the VIX and VXO are once again showing extended momentum to the downside, indicating growing complacency and comfort with stock prices.
Yet if the S&P 500 can close convincingly over 1060, and hold above it for a necessary little congestion period, then I think there's a darn good chance it's going to inflate quickly to 1150 -- the 50% retracement level of the bear market. And the old market adage will be proven true again that bubbles -- and "echo-bubbles" too -- can go farther and last longer than anybody can predict.
Sentiment Dashboard
By Adam Oliensis
SENTIMENT TANK: Drained by 1 point to 3% full of negative sentiment.
SHORT-TERM: In Neutral state.
MID-TERM: Progressed 4 points in a new Advance phase to 37% Confidence at a bullish +3.
LONG-TERM: Rolled up into an Advance phase after flickering to the downside. Now moving up at 82% on the Advance side with Confidence at a bullish +5.
BOTTOM LINE: The bullish Confidence numbers pulled the gauges around into Advance phases, at least temporarily. Confidence numbers will suffer a setback after Monday's session when Seasonality moves from Bullish to Neutral with a Downward bias for a couple of weeks. The advance phases will be confirmed if the SPX closes above 1062. However with the tank at a meager 3% and with seasonality no longer providing short-term support, we'd expect such a breakout to engender significant testing down of breakout levels from above. The potential for explosive movement still appears to be to the downside.
Se não receio o erro é porque estou sempre pronto a corrigi-lo
There's no bull side and no bear side. JUST THE RIGHT SIDE!
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