Let’s take a peek at where the market currently is using Stops and Target’s S&P 500 Futures summary tab as a proxy…
- A Top Spotter signal was generated on September 21st at 2947. That signal was confirmed on a cross below 2932 on September 24th.
- The short-term trend flipped bearish at 2925.50 on October 4th. The stop/reverse line has followed that trending move down and is currently at 2898.25.
- There was a bounce at intermediate range envelope support yesterday at 2866 for both the short and intermediate terms.
click image to enlarge
In previous posts I mentioned that the market has been dominated by events in the intermediate timeframe since the current leg up started at the major Bottom Spotter–and that we wouldn’t see any change in that paradigm until the rising lower range envelope channel (shown as dashed green lines on the chart above) is eventually broken and held to the downside.
On the chart above the major event sequence is as follows…
- Top Spotter at 2892.25 on 29-Jan-18
- Bottom Spotter at 2452.75 on 06-Feb-18
- Range top rail resistance touch at 2814 on 13-Mar-18
- Range bottom counter trend buy at 2560.75 on 03-Apr-18 (cyan shading on chart above)
- Top Spotter at 2801 on 13-Jun-18
- Intermediate trend start buy at 2722.75 on 05-Jul-18
- Top Spotter at 2947 on 21-Sep-18
- Range Support buy at 2866 yesterday
So, here were are now between intermediate range support at 2866 and the short-term stop/reverse line at 2898.25…
A breakout above the stop/reverse line at 2898.25 would be a confirmation of the support buy at 2866 and will bring in momentum buyers (and smart bears buying to cover) if that happens. On the other hand, a break below *2866 would be a significant change in the character of this very powerful bull market, which has not even sniffed a touch of that rising bottom rail since the intermediate range bottom counter-trend buy signal way back on 03-Apr-18.
So ‘head’s up’ …this is an important juncture right here. Watch the short-term stop/reverse line for clues going forward.