Triangle

Short-Term:

Last week we stayed within the range of the prior Friday’s outside bar. Therefore, we have a small triangle pattern setting up. This means mostly everything from last week is still applicable. Chances are we are still set for a final push up. Interestingly, we have a few of our bounce models triggering with out any real selloff. This is another sign that Bulls are weak, as these should not be triggered in a strong bullish leg. If The Bears can once again stop this push, then they will start to take back control.

Statistics for 1 up week on the S&P: 50% chance to close green the following week with a profit factor below 1. Not good for Bulls.

Medium-Term:

We saw a large move down on May 17th which was quickly bought. This low formed yet another “rare” V bottom. The market has been sucking in short with these quick drop only to quickly squeeze them, forcing the market even higher.

We are currency on the course to 248 target. As we stated over the last few weeks: such a run will increase the chance of an abrupt pullback with little or no warning. This is because we are entering thin air, with the market very over extend. Also, the lack of broad rally and weaker momentum further increases the potential.

The Bulls have bought themselves more time as we have seen over the last month. Overall, this could be a final flag breakout which will finally lead to the 5% pullback we have been waiting for over the next couple of months.

Also of note, SPY has been above its moving average (the blue line) for 30 periods. This is extremely unusual and we normally leads to a fall below this average in the near future. This is now the longest period above the average since 2003 (about 50 periods), so we are in very rare territory.

Long-Term:

Long-Term Market Outlook (Updated 4/16/17).

The Calendar:

This week we will see new housing data and some Fed speakers.

Next week: will be topped off with the GDP report.

Trend Following Models:

Our long-term models are Bullish.
Our medium-term models are Bullish but turning Bearish.
Our short-term models are Neutral.

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