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It was a bearish week for the US equity indexes. Just a short break in the current daily and weekly upcycle! Very short-term cycle outlook offers a little negative biased chop ahead of the Wednesday, 21 FOMC next rate hike meeting. At the latest shortly after this time event or time trigger, all the important US stock indexes should resume their upward trend and then deliver their individual month highs near the end of March.
Today I want to paint the picture of the S&P 500 index with the help of the S&P 500 e-mini future contract (ES #). Which swings and targets according time and price could be up for the next few weeks ...
As with the Dow Jones (here - click me ...) or the NASDAQ-100 (here - click me ...), future forward signals, except for my express contrary advise, should only be taken on the basis of futures contracts because only these reflect the important and turbulent February panic cycle accurately. As the real panic cycle lows came in during the Asian trading hours at that time.
Today, we only need the weekly chart for the analysis and the forecast.
Everything relevant for this year started at the Brexit Low of 2016. This was extremely important higher low in the ongoing bull market. Also, the bearish Brexit panic extreme can be properly modeled only with the futures market, as it also was printed during overnight trading hours.
In the first step. we measure upwards a "classic" 8 Fib number initial up impulse. At the first glance, we see that the following week candles found important resistance at GUNNER24 Blue Arc. This former important Blue Arc threshold triggered a multi-month correction cycle that finally bottomed within green/yellow oval.
Within green/yellow oval, the 2016 Trump Low spiked accurately into natural GUNNER24 Support Angle. That Support Angle hit was a next overnight trading hours panic extreme and we all know and see again above what happened after Trump elect.
We have among other stuff confirmation that the setup was important for the price, as both the given 1st double arc and the projected 2nd double as well as the 4th double arc natural resistance uptargets could brake or halt the bull market for more or less long time. Only at the 3rd double arc the price refused their mathematical existance or presence, he just went through there.
After this brief assessment of the 2016 and 2017 bull market years and the proof that the measured 8-week up impulse and the resulting setup had important future influence on the price, we next jump to the 2018 analysis and a near 2018 forecast. I begin at alltime-high (ATH) which visibly did not reach or touch the activated natural bull market uptarget of the 5th double arc. Before a 5th double arc test or work off the hard, sharp February panic correction occured. We remember that the 5th GUNNER24 Double Arcs are ALWAYS MAIN targets of a strong trend. As far as equity-related markets are concerned... remember that ... this is important for the near-term development.
Starting at ATH, it plunged directly and 100% accurately into most strongest naturaly bull market support, which is always the W. D. Gann 1*1 Angle. ES # spiked hard into 1*1 Angle main support and this finished the February panic cycle and as it should be in healthy bull market, a new weekly upcycle started to the T on the strongest bull market support out of very important 2016 Brexit Low.
And because underway weekly upcycle has re-conquered purple marked "2016 Support Angle" two candles ago on weekly closing base (strong GUNNER24 Upcycle Continuation signal) and this for the bull marked also very important rail has held/is defended at this week candle, close the market MUST REACH and MUST WORK OFF 5th double arc main uptarget magnet within next 1 to 3 week candles!
The very first test of 5th double arc main uptarget resistance is due until 6th of April, at the latest! = a serious backtest of ATH should be expected now! For this watch my green arrow placement. This is my shortterm forecast!
For the exact destination, where the market very likely will run up till about 6th of April we do this measurement now. An extremely interesting setup. A beauty as far as the extremes of 2018 are concerned.
Again, the upwards measurement begins at 2016 Brexit Low:
Now, among other things, the Blue Arc exact is pulled up to the top of the 13th week of the new multi-year bull market. As a result, the Blue Arc natural main resistance also captures the exact top of the 7th and 16th week of the new bull market. Additionally, this initial up impulse measurement depicts two week closings and a week opening auction and another weekly high (# 14 = 13 Fib number + 1) at or very, very close to multi-months ruling Blue Arc threshold.
==> This very, very confirmed Blue Arc placement predicted among the other stuff - I do not want to go into detail anymore - bull market main resistance uptarget/upmagnet starting at 5th double arc. And there the 2878.50 ATH exactly was brought in!
==> And as it is often the case, the very first test of the 5th main bull market uptarget led to an initial brutal negative reaction. The heaviest sell-off in 2 years!
==> The ATH is in 100% direct connection = harmony to the received important 2016 Brexit Low. The market at ATH found MAJOR resistance in the combined weekly & yearly time frame - a high made at GUNNER24 Main Double arc that is a high for the year or is an ATH is always a resistance prevailing in the yearly time frame!!
The violent initial bearish reaction to the 5th double arc main target allows that there and then the bull market ended finally, and thus a new bear market (3 to 12 month duration) was triggered at the all-time high.
!!! However, this bearish option is totally opposed to the extremely violent bullish counter-attack after the second test of the 1*1 Bull Market Angle at February 2018 (Feb18) correction lows!!!
The fierce bullish rebound, including extremely bullish-looking Feb18 Spike Low suggests much more that printed Feb18 Low is just the next really important higher bull market low! A short but violent bull-shakeout!
Consequently, sometime later in 2018, the future 5th double arc resistance should be overcome in bull market (trend) direction!
But not yet in the upcoming second test, so my bid!
I rather expect this for shortterm according price and time with a 60% probability:
First the weekly upcycle (green arrow) should continue until the second 5th double arc test comes due until at latest April, 6. Then somewhere between 2830 which is lower line of yearly 5th double arc and 2857 which corresponds to the upper line of yearly 5th double arc an important LOWER HIGH in the weekly is due or will come true, and this initial bearish pattern triggers another "possible" panic cycle or sharp drop which very likely will test the 1*1 Bull Market Angle somewhere between 2635 and 2603 sometimes early May 2018.
Watch! The 2635 horizontal springs from upper line of 3rd extreme, the 2603 horizonal springs from lower line of 3rd double arc extreme, together and in major support company with 1*1 Bull Market Angle forming a future strong support range and major downside attraction magnet.
==> Think just a next test of 1*1 Bull Market Angle triggers enough bullish forces to overcome the yearly 5th double arc main resistance finally at third test/attempt = for this watch the fat dark-green-dotted arrow placement.
Just with a 40% odd the market should be able to clear existing 5th double arc main resistance at the soon upcoming second test = for this watch the fat dark-blue-dotted arrow outcome! The countless times proven strength of this bull market speaks for a very quick overcoming of the 5th main resistance. And of course, the seasonal aspect. US stocks are always uber bullish into May ...
Be prepared!
Eduard Altmann
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