The SPX made a bull market cycle high on 5/20/15 at 2134.72 and a monthly low of 2067.93 A monthly close below the low of the high month in June was the trigger for a highly significant 7 point RST that dates back to the 1998 bear market low, which is outlined on the SPX monthly chart. Most of you familiar with my work are well aware of the RST formation and the long term significance
The bull cycle also had a longer term significant negative 5 RSI monthly momentum divergence, and the SPX was being manipulated up on a minimum of stocks so it doesn’t take much for the Central Bank to move the index higher
I have included parts of my June commentary – “Significant Time Symmetry”– which is also in my commentary archives on the TM site:
“The SPX has advanced +220% from the 667 bear market low [3/6/09], or a +3.2 bagger. However, this central bank equity bubble is out of control and so is the Fed, therefore the risk reward, in my opinion, obviously favors a significant reduction in portfolio equity exposure. One way is to stay in any SPX index fund if that is your primary, and use the SPX 12 month EMA less 1%-2% as an escape hatch trigger”
“The next major Economic Confidence Model 8.6 year cycle date is 2015.75 [Martin Armstrong], which is the first week in Oct. The SPX high monthly close in this 75 month bull cycle is 2107, which is the 1.618 [2105] fib extension of the 2007 bear market from 1556-667, so it is also a significant Fibonacci symmetry juncture, with a major negative monthly momentum divergence [5 RSI].”
The SPX was -5.8% last week after the -2.1% and -3.2% air pockets on Thur and Fri, in addition to the carnage in China and other global markets. This was followed by the massive opening discount today which was accelerated by the the “electronic execution” process. The INDU was -1089 points, or -6.6% on the opening while the SPX was -103.89 points or -5.3% as it made an 1867 low.
The SPX -3.0 VB today was 1899, and the index immediately reversed above an 1889 high of the low bar, which was a day traders bonus, and ran to 1954.09 before reversing down to 1879.98 at the -3.0 VB again, followed by a bounce to 1925.09 before closing -3.9% to 1893.23. All of the major averages are well below their 200DEMA’s and of course the SPX has triggered the RST and break below the 12 month EMA which some of you have used to significantly reduce portfolio equity exposure as the bear market unfolds. There will be more opportunities for you reduce exposure as the Fed will do everything it can to keep the ponzi scheme going, but sell strength as this a traders market.
