The market’s rebound was not confirmed by cycle screening measures, but that may be due to a problem with the indicators.
The downtick in the market was supported by short term cycle screening measures.
Indicator status was virtually unchanged and there was no change in cycle projections as stocks continued to test the highs and try to break through resistance. Short term cycle projections continue to point to higher prices.
Stock prices continued to rise majestically, as if through thin air, on Friday. The S&P now faces a band of resistance at 1840-50, with trend resistance around 1860. A meltup channel has formed.
The market continued its run toward the test of the highs with most technical indications suggesting that it will get there and potentially move beyond that level.
There were no notable changes in the technical picture on Wednesday as the market took a breather. The only cycle with a projection so far in this rally is the 4 week cycle, which points higher, but with a few “ifs, ands, or buts.” Here’s what they are.
The rally continued blowing through lines of assumed resistance.
Friday’s rally follow through day rendered the break below SPX 1780 earlier last week into a false breakdown. These normally have bullish short term implications. The rebound also kept the 15 month uptrend from the November 2012 intact.
Buyers came roaring back after repeated tests of support around 1740 held over the past few days. That was enough to turn short term cycles up, with up phases due to last a week or more. The question is whether 13 week cycles will follow suit.
Technical indicators showed slight improvement as the market again plunged to threaten a break of major support before rebounding back to short term resistance. The SPX still needs to close above 1752 to break the centerline of a short term crash channel.