The Intermediate Term Market

This is the third blog post on the current status of the market, here the intermediate term timeframe, as shown on this weekly bars chart...

An uptrend (not accelerated) started in early February 2016.  Its first pullback supported at the first Midas support curve, but the second pullback strongly broke down through the second Midas support curve.  This means that uptrend ended.  But quite dramatically, last October, the strong down week that ended that trend came to a screeching halt right at the level of the S2 support curve on the monthly bars chart.  From there, price bounced up sharply into a new accelerated uptrend to which that TopFincder is fitted.  It's about 74% complete now, projected to end at the dashed purple vertical line.  

 

It's interesting to compare this chart with the long term monthly bars one that I just posted.  On the long term chart we see a pullback last fall from which S3 is launched.  That pullback corresponds with the location of the start of the TopFomder on this weekly bars chart.  It appears that the long term and the intermediate term TopFinders will end at about the same point.

The Long Term Market

This is the second of three blog posts on the current status of the market.  Here is the monthly bars chart of SPY...

On this time frame, we see an accelerated uptrend that started mid-2011, with its fitted TopFinder TF1 which ended in mid-2014.  This was followed by a two year long trading range, bracketed by the blue lines.  Late in that trading range, a new accelerated uptrend started in late 2015, spawning a three-fold hierarchy of Midas support curves (S1, S2 and S3), along with a fitted TopFinder which is currently about 78% through its duration of 46 billion shares of cumulative volume.  The purple vertical line marks the projected end of this accelerated uptrend.  And as I said in the last post, ignore the dates that the plotting program has placed on the horizontal axis going into the future.  We will know when the trend ends when we get there, but not before.

Semiannual, Quarter, Month and Week-end Reviews

At the end of last week, we are at the end of the week, the month, the quarter and the half year.  It's time to review what the market, as exemplified by SPY, is doing on all four of these time frames:
•  Very Long Term - Quarterly bars chart
•  Long Term - Monthly bars chart
•  Intermediate Term - Weekly bars chart
•  Short Term - Daily bars chart.

I'll do this in three blog posts here, starting with this one, Very Long Term.

But first, let me reiterate my general understanding:  One cannot predict the market.  Technical analysis, including my Midas tools, does not and cannot predict what prices will do in the future.  Rather, it shows what the market is doing in the present, and it is exquisitely good at detecting and signaling when the market's behavior has changed so that you may keep your trading in line with the market.  And that's how to make money in the market, not by following a prediction, but rather by carefully staying in sync with the market.  So, nowhere in my posts here am I making any prediction of the future movement of the market.

The Very Long Term, the quarterly bars chart

Here is the quarterly bars chart of SPY from its 1993 inception, plotted in candle volume display...

The market has been in an uptrend since that historic bottom in early 2009.  There was a modest pullback in 2011, but from there it launched into an accelerated uptrend.  The definition of accelerated is that the first pullback (here in 2015) occurs far above the Midas support curve launched from the beginning of the accelerated trend - the middle green curve here.  When this happens, we may fit a TopFinder curve (TF) to the trend, the purple curve here.  The value of the free variable, the fitting parameter D, needed to fit the curve to the pullback is the projected total cumulative volume that the trend will have consumed when it ends.  Here, D is 350 billion shares.  Right now, the accelerated trend's cumulative volume is 50.2% of D, so at present we are half way through the duration of this accelerated trend as measured by cumulative volume.  Since the chart's horizontal axis is linear in cumulative volume, not time, I can and have placed that dashed purple vertical line at the horizontal location corresponding to 350 billion shares of cum vol, which is the projected horizontal location of the end of this trend. 

Notice that this is not a prediction of when and at what price the trend will end; we don't know when and at what price, but we will know when we get there because D will have been fully consumed.  The date we get there depends entirely on what the trading volume per quarter will be going forward, which we don't know.  This chart is produced by MetaStock, and that program makes some very dubious assumptions about what the future trading volume per quarter will be and places dates in the future accordingly.  Those date should be completely ignored.

Conclusion:  On this time frame the market is half way in cum vol through an accelerated uptrend that began in mid 2011.