by Antonis Benis, on Dec 9, 2019 4:56:32 PM
S&P 500
This is a follow-up of my previous report on November 26th.
The Advance/Decline line is still holding strong, no divergence there; however, it did not make a new high, while Smart/Dump money confidence spread is at levels typically seen at market tops (see charts 1,2)
"courtesy to sentimentrader.com"
"courtesy to sentimentrader.com"
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Seasonality
Seasonality is supportive from mid-December until the last trading days of the year [100% winning trades in the last 69 years (US presidential cycle, pre-election year)], up until the first 1-2 weeks of January (see chart 3).
"Courtesy to seasonax.com"
The weekly TD sequential Sell setup for SPX is @7, will enter price exhaustion territory this week where it can record a TD Sell Setup @8 and a TD Sell Setup @9 the following week (i.e. close above 3110 on December 20th).
Cycles for the S&P 500, suggest a top today and another one on December 20th, followed by a decline into the first part of February (see chart 4 with added dates)
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Gann Analysis
Gann analysis: Resistance at 3154 (reached), 3208/3218, 3240 and 3271/3282 (see chart 5).
Of interest is that NASDAQ 100 has already reached a very strong, from a Gann analysis perspective, resistance level (see chart 6).
Apple
APPLE (stock), made a new high last Friday. It has some resistance nearby ($273), however the much better one is at $287/289 (see chart 7).
There, at the latest, investors should liquidate their positions, traders should look for and take sell signals.
Bottomline: IF the stock markets exceed the November high, expect an important high just before Christmas or early January at the latest (seasonality this time around is hard to ignore). Upside potential is very limited (2-4%).
Investors should not chase these markets higher, use the positive seasonality in order to lock in their profits; there will be better prices in the months ahead.
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