Starting the month outright bullish

US equities start a new month in an outright bullish posture, having ramped from sp'1820 to a new historic high of 2024. However, underlying price momentum is STILL swinging back toward the equity bears, but a break <sp'1900 before year end looks very difficult.

sp'monthly9

Summary

Suffice to say, with new historic highs, it is somewhat pointless to argue for a broader bearish outlook... and indeed, for the moment... I will refrain.
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However, it is notable that despite the ramp into early November, the underlying MACD (blue bar histogram) continues to tick lower, and it is indicative that this market is way overbought, having not had a decent 15/20% correction, since the giant up wave from Oct'2011.

For the moment, sp'1900 looks to be primary support. Sure, if that fails, then the 1700/1600s are again viable, but right now... with the JCB AND the Japanese Govt' increasing their purchases of bonds and stocks (domestic AND foreign)... there is an underlying bid to most world equity markets.

It really is a case of the JCB picking up the slack from where the US Fed have left off.


sp'monthly8 - US QE phases

As we saw in mid October, it does not take much to spook the Fed officials, with Bullard being wheeled out for 'psychological support'.

The real question should arguably be... just when will QE4 begin next year... what will they be buying, and how much?

Back to 7 with a bounce

With the sp' climbing from 1820 to the 1940s across just five trading days, the bigger monthly cycle is back to outright bullish. However, this is not entirely unexpected, and even if the bulls can hold the mid 1900s... November will turn back to MARCON 6.

sp'monthly9

Summary

*it is notable that despite the current bounce, the Dow, R2K, and NYSE Comp', remain MARCON 6
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Suffice to say, a bounce from the low sp'1800s into the 1900s was not unexpected, and seeing the monthly MACD (blue bar histogram) cycle turn back positive was neither surprising.

Barring a sustained move back above 1970 or so.... the monthly cycle for the sp'500 will turn negative again at the start of November.

Major equity down wave underway

The US equity market appears to have hit a wall at sp'2019... and having now fallen to sp'1906, we've seen a rather important bearish monthly MACD cross. MARCON status is lowered to 6, for the first time since January 2012.

sp'monthly9

Summary

With the extra few points lower into the Friday close, the sp'500 saw a bearish MACD cross, and went negative (blue bar histogram) cycle on the giant monthly cycle.

... MARCON 6... for the first time since January 2012.
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It is notable that the R2K turned MARCON 6 in July.
The Dow turned MARCON 6 at the Monday open of this past week.

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No doubt, the sp'500 will likely bounce in the latter half of October, and MARCON status will likely have to be changed back to 7.. but still.... today was a key warning.

Market appears headed for sp'1750. If analogous to the summer 2011 retracement, then target would be 1650.