Current Position Of The Market – 11/1/2015

“By the Law of Periodical Repetition, everything which has happened once must happen again, and again, and again — and not capriciously, but at regular periods, and each thing in its own period, not another’s, and each obeying its own law… The same Nature which delights in periodical repetition in the sky is the Nature which orders the affairs of the earth. Let us not underrate the value of that hint.” ~ Mark Twain

SPX: Long-term trend – Bull Market

Intermediate trend – SPX has resumed its uptrend in order to complete the last phase of the bull market.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses longer market trends.

MINOR CORRECTION IMMINENT

Market Overview

Last week, SPX pushed a little higher, possibly completing a 5-wave structure from 1990.  The high of the week was 1094.32, a little shy of its ideal projection, so there may be another attempt made before the anticipated correction starts.  

Friday’s close (which was on the low of the day) was well below a congestion level and it looked as if the bears had regained control but, as we will see later when we analyze the hourly chart, this move was not confirmed by the A/Ds which closed positive and exhibited strong positive divergence. Also, neither IWM nor QQQ seemed to be concerned about Monday’s opening.  Unless some negative news over the week-end triggers additional selling, there is a chance that SPX will make another attempt at reaching its ideal target before the structure is complete!

In August, when the index started its steep correction, it penetrated the bottom trend line of a bullish intermediate channel that started forming in October 2011.  By rising to 1094 last week, it has now back-tested the bottom channel line and this, in conjunction with other factors, could halt its uptrend from 1872, at least temporarily.  If so, this would bring about the best correction since the beginning of that move.