Overlayed on each of the following two monthly charts of the S&P 500 Index (SPX) is a Fibonacci Speed Resistance Fan.
The first one is taken from the low of March 2009 to the high of May 2015, which preceded the last major pullback to first fanline support and prior to the recent minor one this past February. Based on this fan trajectory, the first major resistance level sits just above the last all-time high (of 2872.87) at 2900.
The second one is taken from the low of March 2009 to the high of January 2018, which was when the last record high was made. Based on this fan trajectory, the second major resistance level sits at 3033.
It's been quite a while since we saw a pullback to first fanline support (a year and a half), and this nine-year (predominantly) bull run is running the risk of a much larger pullback, the longer it keeps breaking record highs.
And, we're approaching the U.S. midterm elections, which are only three months away, as well as getting closer to more rate hikes by the Fed as they still have three chances this year to do so. Add to that mix the potential for a trade war escalation, and there are building headwinds for Q3 and Q4.
The momentum (MOM) and rate-of-change (ROC) indicators have been waning since January of this year, as shown on the next monthly chart. In fact, the ROC is hovering just above the zero level. Both MOM and ROC made a new swing high as price set its record high in January.
If we see a push higher to 2900, or even 3033, keep an eye on MOM and ROC to see whether they make a higher swing high than January's. If so, we may see price eventually push higher.
Otherwise, we may finally see that larger pullback occur.
Finally, I last wrote about the SPX:VIX ratio in my post of July 10.
Price has recently popped above what is now minor support of 225 and major support of 200, as shown on the following daily ratio chart of SPX:VIX.
The 50 and 200 MAs have formed a bullish Golden Cross, and all three technical indicators have made new "BUY" signals, but are still in downtrend.
If the SPX reaches 2900 or 3033, I'd like to see price, RSI, MACD and PMO on this ratio make a new record high (in addition to new swing highs on the above-mentioned MOM and ROC indicators), to confirm the possibility of a bullish bias being sustained.
Otherwise, that larger pullback may occur on the SPX.
Welcome and thank you for visiting!
The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.
DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...please read my full Disclaimer at this link.
UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. May 12 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Fri. May 14 @ 8:30 am ET ~ Retail Sales Report & Core Retail Sales Report
* Wed. May 19 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. June 2 @ 2:00 pm ET ~ Beige Book Report
* Fri. June 4 @ 8:30 am ET ~ Employment Data
* Wed. June 16 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events.