S&P 500 Rally Signals Strength as Market Approaches Key Resistance
2025.02.07 06:52
Monitoring purposes; Long SPX on 1/27/25 at 6012.28.
Our gain 1/1/24 to 12/31/24 = 29.28%; SPX gain 23.67%.
Our Gain 1/1/23 to 12/31/23 SPX= 28.12%; SPX gain 23.38%.
Monitoring purposes : Long on 10/9/20 at 40.78.
We ended up 29.28% for 2024; SPX up 23.67% for the year. We shaded in light blue where the TRIN closes came in near 1.20 and higher, which suggests panic is present and panic only forms near bottoms. The panic TRIN closes the group between 582 to 600 ranges suggesting a large support area. We also noted times the TRIN closed near 1.20 and higher in blue on the chart above, showing what days the TRIN showed panic.
Yesterday, the TRIN closed at 1.50 and bullish. Seasonality has turned bullish and lasts into mid-February. A candlestick pattern called a “Bearish Engulfing” formed last Friday and most of these patterns’ highs are tested and may be where the SPY is heading (the high came in at 609.96 SPY). The has been down 3 days in a row which leans a bullish sign for the SPX. Long SPX on 1/27/25 at 6012.28.
Intermediate-term lows form when there is a “Selling Climax” (SC) and immediately after a “Sign of Strength” (SOS) forms. If there is no SOS after an SC then the market will continue lower until a “SOS” is formed after a “SC” which is called a “bullish setup”. We updated the above chart from yesterday and there appear to be two “bullish setups”.
Yesterday we said, “This chart above favors the bullish side. The bottom window is the NYSE advancing/NYSE declining with a 5-day average. A bullish sign for the market appears when this ratio falls below .7 and then rallies to 3.00 in 30 days or less. On 1/13 the indicator reached .7 and rallied to 3.27 on 1/21, 6 days triggered a bullish sign.
The top window is the NYSE McClellan Oscillator which also had a bullish setup. A bullish sign is triggered when the McClellan Oscillator reaches below -300 (reached on 12/19/24) then rallies to +200 within 30 days (reached +200 on 1/21/25).”
Updated this chart from yesterday and yesterday’s commentary still stands,
“The bottom window is the weekly Silver/Gold ratio and the top window is the weekly . This chart dates back to 1980. We shaded in pink horizontally the times when this ratio fell below .0125 and then shaded in pink again vertically to denote where that level fell on the XAU. Readings below .0125 (current price is .0119) on the /Gold ratio produced good areas to buy the XAU. When this ratio reaches .02 and above, intermediate tops can occur. What is interesting here is that this ratio in general has been below .0125 over a year during which the XAU has rally 50%. Gold stocks still appear cheap and a good buy according to the Silver/Gold ratio.”
