Commentary

The Big Picture

$SPX Month

The short term monthly view shows the three tops, the first forming in January, 2018. The blue line is the 13 month moving average (on closing price) and the red line is the 39 month. The last time those moving averages crossed was in December 2010, which all in all was a good time to buy.

$SPX Month 2005-2013

Note that an investor selling the super ludicrous death cross at 1106 at the end of September 2008 and buying the monthly golden cross above at the end of December 2010 for 1257 would have deservedly lost money.

The 39 month average at 2511 seems to be sort of a normal worst case scenario at the moment. Such a move would not invalidate the bullish case. The proximity of $SPX to the 13 month average is more immediately alarming. One might also suspect that any of the various monthly swing lows over the past 18 months are in play.

The saving grace for the bulls is that the intermediate move that started in May seems much less serious the declines of February 2018 or October 2018.

$SPX Week

The area, between the 13 week and 52 week averages generally features high volatility, but this trip has been relatively calm. The two previous tops saw savage declines while here we see mostly indecision. The most likely course seems to be for a trading range between 2700-2900 perhaps lasting through the summer.

A strong move up from here over 2900 would be quite remarkable and bullish. This would be a nice technical place to contain the decline; above the 52 week average with a four week bottoming formation. That view seems somewhat fanciful however. Shorting is usually dubious but may be worth considering on a sharp move to the high 2800s.

$SPX Day

If anyone ever sees something I’ve written discussing normal daily moving averages (eg 20,50,200) in a non-negative manner, my body has probably either been taken over by a space alien or I’m being blackmailed.

The daily chart shows the 54 and 162 day moving averages. 54 * 3 = 162. The 162 day average at 2750 appears to be sloping down at 2750 despite current prices above it. In order to get that low, formidable resistance must be broken at 2800.

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