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CNBC SquawkBox Europe

LET'S LOOK AT THE S&P 500 INDEX DAILY CHART

S&P 500 Index retracement rally daily chart

Two weeks ago I indicated the current congestion at that time could not be a high because there needed to be at least three more days of congestion or sideways movement. Now the index is showing something else that is identifiable. There is an ascending trendline and one day counter trends down which indicates this trend is accelerating and entering a blowoff style of trend. The timing to end this style of trend is 45 to 48 days, 60 to 67 or 90 to 99, all calendar day time windows. The highest probability is 90 days and if that is the case then there could be some congestion around the 45th day or midpoint to the cycle which is Monday. The next time window is 6 April and there is a significant cycle April 11th at 50% of the 5 year cycle and historically could be a high so we'll need to see how that sets up. So our time fro this rally to complete is April 6 through 11th and the early part of May.

LET'S LOOK AT A WEEK CHART AND PRICE PROJECTIONS

S&P 500 Index 4-year chart

Since ALL HIGH AND LOWS are exact proportions of previous ranges we can look at the extension of the previous ranges for "PRICE." The last move down was very small and failed to even reach a ¼ retracement. Because the correction was abnormally small we can assume a strong move up. The normal extension for a 5th leg is ¼ at 1270. If we take the range up from the July low then 1220 and 1256 are the two key prices.

THE NEXT RANGE OF SIGNIFICANCE IS FROM THE MAY 2008 HIGH

S&P 500 Index retracement rally

This has been very effective and the next resistance is 1247 with possible minor resistance at 1182. So the key resistance is 1220, 1247 to 1256 and 1270. All we need to do now is see what the volume, wave structure and pattern of trend are when approaching these price and time windows. Also remember the index will not reverse trend until there is sufficient sideways distribution which could take three to six months.

Two weeks ago I said wheat and beans had completed counter trend rally's and were about to exhaust into lows. Those lows might now be in place. These could be significant lows due to a 60 year cycle but I'd like to see a bit more evidence as I thought wheat could go down into April 11th. I also indicted the dollar was going down and that may have also hit its low the move down has been a real struggle and could be complete. It has fallen 11 trading days and gone nowhere. One of the key dates for the dollar is 19 April.

 

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