Technicals | Jan 18 2018
17/1:
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 2665 / 2405 / 2322 / 2233
Resistance Levels: 2808 (all time highs)
Technical Discussion
17/1:
We are taking a look at the monthly charts on the S&P 500 and the ASX SPI-200 tonight just to see these markets side by side from a longer term perspective. And to really emphasise what a laggard our markets here in Oz have been over a number of years now, compared to the bullish U.S freight train. Of particular interest is the fact that the S&P 500 is now 80.0% above the old all time double top highs from 2000 and 2007, whereas the SPI ASX-200 is still languishing 5% below its own all time highs that were tagged back in 2007. Quite an incredible disparity for all to see.
Reasons to stay longer term bullish (overdue for a medium-term breather):
→ S&P 500 earnings remain well supported overall
→ Elliott Wave count continues to have motive bigger picture
→ retracements have been healthy and well supported to this point
→ price is continuing to push into new all-time highs
→ a pullback is now well overdue
Our monthly chart tonight gives an excellent picture of how price action has performed over the past 30 years. Our longer term labeling of this chart has continued to prove itself from an Elliott Wave perspective for many many years. And this is why we were so early calling that a cyclic bull run was potentially unfolding off the 2009 lows rather than joining the mainstream rhetoric at the time that was calling for the 2009 to still be broken below. As you can see off the 2009 lows we were looking for a higher degree Wave-[V] to kick into gear. Being such a substantial larger cycle move, our projections aligned to the move was that overall it was going to be many years in the making. So even at present levels we continue to remain convinced that there is still plenty of fuel left in the tank just yet for the S&P 500. In fact even when this immediate high point does finally lock into place, it will only be labelled as a Wave-(3) of [3]. Being larger cycle though, once the Wave-(3) does lock into place, the larger Wave-(4), although only looking shallow in relation to the full move off the 2009 lows, will appear to be substantial and bearish for punters who have gotten use to this market endlessly pushing on higher. We believe that a decent breather is getting very close now, and as such we continue to exercise an element of caution. Until then though simply enjoy the ride !
Trading Strategy
'We maintain that the best trading opportunity from here is going to be on the long side, yet post the long awaited dip. ' Nothing has changed in our thinking and with price having turned parabolic, a medium term high just has to be getting close to hand. Last night's rejection may be the start of it, yet one session of weakness isn't going to do it. We are going to need to see some sustained follow through before we can assert that this strong push north is finally ready to take a well deserved breather. A time to start considering tightening stops across the board though. If U.S markets are getting close to locking in some form of high point, then markets across the globe are also likely to catch a cold !
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