September 29, 2023

Since marking an intra-day restoration excessive per week in the past final Friday the SPX Index has pulled again -2.7%. The big cap index had develop into stretched and was due for a worth retracement. Contemplating that the SPX rallied 16.8% in a constructive uptrend from the mid March lows that pullback is barely a “flesh wound” and to date has not been a brief time period development breaker (extra on that later within the Weblog).

Within the Multi-time Body Technical Examine that follows I’ll dig into the burden of the technical proof to find out if the worth retracement will unfold right into a correction of a lesser of bigger diploma beginning with a take a look at the month-to-month time-frame.

S&P 500 Index / Month-to-month

After rising from Cloud assist in March of 2020 the SPX Index rallied to an intra-month excessive (and all time excessive) at 4,808.93 in December 2021. When worth started to fall initially of 2022 I utilized a Commonplace Pitchfork (crimson P1 via P3). I selected that Pitchfork variation as a result of it mirrored the vector or angle of the Cloud mannequin. Over the 9-months that adopted the Index fell 19.44% however costs managed to carry above Cloud assist however assist on the Kijun Plot (strong inexperienced line) was violated. The SPX turned greater in October and that Value pivot at gold P3 was the genesis of a second Commonplace Pitchfork (gold P1 via P3). That flip was in live performance with an essential non-confirmation. Though my MC Oscillator registered a brand new low the Customized Index didn’t (inexperienced dashed strains). Because the greater low on the P3 worth pivot low month-to-month candles have held assist on the rising Decrease Parallel (strong gold line) and the Lagging Line has held above the the Higher Parallel of the Commonplace Pitchfork and over the previous month Additionally the SPX has retaken the bottom above the Kijun Plot and MACD is beginning to hook greater avoiding an entry into unfavourable territory. Until there’s a break of assist of the Decrease Parallel (strong gold line) adopted by a break of Median Line Assist (crimson dashed line) the very long run technical situation stays constructive.

S&P 500 Index / Weekly

The value pivot low within the SPX Index in Mid-March that held assist on the Weekly Kijun Plot (inexperienced line) and the rally again into the Cloud that adopted, together with MACD kissing its sign line and holding in constructive territory gave us the boldness that the uptrend had reignited. These technical adjustments gave beginning to the Schiff Pitchfork (crimson P1 via P3). Costs retook the bottom above the Cloud on the finish of Could however the rally stalled on the Higher Parallel of the Schiff Pitchfork two weeks in the past. The one crimson flag that stands out to me technically, is the Fisher Remodel (decrease panel). The Oscillator is rolling over in elevated territory and may watched carefully as a result of most of the time it serves because the proverbial canary within the coal mine and produces early technical indicators of worth reversal.

S&P 500 Index / Day by day #1

The constructive rally from the March thirteenth worth pivot reversal low that adopted although to early April, gave beginning to the Commonplace Pitchfork (gold P1 via P3) that discovered its origin on the October thirteenth 2022 low (not proven right here) however the rally turned overbought and located itself capped on the Median Line (gold dotted line) and the SPX churned sideways to greater in the course of the weeks that adopted till early June when the SPX pushed greater. Per week in the past final Friday the Median Line got here into play once more and the SPX turned decrease. That was hardly a shock as my Day by day Momentum / Breadth Oscillator had develop into stretched (because it had in late March) and entered over purchased territory leaving the momentum tank empty suggesting a measure of “backing and filling” was so as. The six session pullback has pushed the Oscillator again to impartial. Assist supplied by the Kijun Plot (inexperienced line) ought to come into play (presently 4,280) however extra technically essential is assist on the Decrease Parallel (strong gold line) of the Pitchfork which has contained pullbacks for 3 1/2 months. A violation of that assist would counsel {that a} correction of a bigger diploma was unfolding probably leaving the highest of the Cloud and a Fibonacci 50% retracement of the rally from the March lows at 4,125 within the Bears crosshairs.

S&P 500 Index / Day by day #2

The second Day by day Chart of the SPX Index “zooms in” on the current worth motion. I’ve added a shorter-term Pitchfork. It is a Schiff Modified variation (purple P1 via P3). Except for two minor violations of each the Higher and Decrease Parallels (strong purple strains) costs have been contained within the confines of the Pitchfork for the reason that March worth lows. Though MACD confirmed the upper excessive in worth per week in the past final Thursday, the momentum oscillator has rolled over via its sign line though it stays elevated in constructive territory. Key to a bullish a technical thesis that the present worth pullback is barely a minor worth retracement would be the giant cap index’s skill to carry the cluster of assist afforded by the Decrease Parallel of the Pitchfork and the Kijun Plot (inexperienced line) at 4,280. A break of that stage will probably shortly result in a take a look at of second short-term assist at 4,160 as a correction of a bigger diploma unfolds.

I count on a superb measure of window dressing going into the tip of the month and extra importantly the tip of the primary half of the yr. When that mud settles the directional bias within the SPX will develop into clearer over the upcoming buying and selling periods because the second half of the yr begins.

Charts are courtesy of Optuma and knowledge is courtesy of Bloomberg.

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To be taught extra about Median Line Evaluation, AKA Andrews Pitchfork readers might avail themselves to a 3 half tutorial written on my own and Kyle Crystal. It may be discovered at

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