• 399 days Will The ECB Continue To Hike Rates?
  • 399 days Forbes: Aramco Remains Largest Company In The Middle East
  • 401 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 801 days Could Crypto Overtake Traditional Investment?
  • 806 days Americans Still Quitting Jobs At Record Pace
  • 808 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 811 days Is The Dollar Too Strong?
  • 811 days Big Tech Disappoints Investors on Earnings Calls
  • 812 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 814 days China Is Quietly Trying To Distance Itself From Russia
  • 814 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 818 days Crypto Investors Won Big In 2021
  • 818 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 819 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 821 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 822 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 825 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 826 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 826 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 828 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

CNBC Squawkbox Europe

LET'S LOOK AT THE S&P 500 INDEX

Two weeks ago on Squawk Box I said stocks looked good and the index would rally 12 trading days then we'd have to assess it again. Yesterday was the 13th trading day of the rally so here's the assessment. As we discussed last week, if this were a last leg down in the bear campaign the time of that leg would be either 60 to 64 days or 90 to 99 days from the January high. The low was 60 days from that high and 90 days from the December 8th high which was very important because many stocks including the financials hit their highs on that date. The index was then 90 days form the December high and since 90 is a completion cycle for many stocks it carried a strong probability of ending the leg down.

If the rally could exceed 3/8 of that leg down it was sufficient confirmation the leg down was complete and there would be a strong rally into the 12th trading day.

This vibration in time should continue so there are three important time windows the next two months. The 6th/7th of April at 30 days from low and 90 and 120 from highs. If the index goes down into that "time" with a 3 to 5 day move down it would be bullish and present a low. If the index goes up into that date with a distribution pattern it could indicate a run at the March lows. The next important time window would be around the 20th of April at 45 calendar days from low and then 60 calendar days around the 6th of May.

If this is an end to the bear the index will either build a base that will take out to May 6th as it did in 1938 or the index will test the March low. This has been the largest month up since October 1974.

SO LET'S LOOK AT OCTOBER 1974 IN THE S&P 500 INDEX

The low to the 1973/1974 bear campaign was October and December. During 1974 the index found low in October and ran up into an early November high and turned down on the 32nd calendar day from low. But there was a very obvious distribution pattern going into the 30 day time window. So far our current circumstance doesn't show a distribution. It then went down 32 days and provided a higher low at 45 days from high. The Dow Jones Industrials moved to a marginal new low below October in December 1974 creating a bullish divergence between the two indexes.

I am confident of the time periods, it will simply depend up how the index goes into those time windows to determine if the bear campaign is complete and if it will build a base of retest the March low.

 

Back to homepage

Leave a comment

Leave a comment