A McMillan Spike-Peak Index Buy Signal was registered yesterday, while a McMillan Volatility Bands Buy Signal just hit today. This last occurred on 3/26/20, near the March 2020 lows. As encouraging as this is, a close above $SPX 4430 would still be necessary for bulls to take charge of the short and intermediate term.
As is so often the case, everyone wants to sell at once. That happened yesterday, with $SPX down 127 points at one time. But it rallied strongly after 3:15pm, and continued to rally overnight. We’ve seen this story before: the one day wonder bear market followed by another month of rising prices. Somehow, that seems all too convenient, but it could be happening again. Let’s work through the indicators, which are all over the place at this time.
For now, $SPX has tentatively found support near 4435. But that only occurred this week, so it is hardly seasoned or tested. The first truly tested support area is still the major one at 4370, and that is not too great of a distance from today's levels. As long as the support at 4370 holds, the bulls are still in control although it might not completely seem like it right now. A violation of that support area, though, would change things in a negative manner.
After making a new all-time high on September 2nd, $SPX has failed to add to the gains. Perhaps the sideways movement is all the correction that this market needs, similar to what we saw at the end of July. Regardless, the $SPX chart remains bullish in that it is above support and all of its major trendlines are moving higher.
There is nothing unusual about this week's market action. $SPX continues to rise after the brief pullback on August 16th to 19th. The NASDAQ-100 ($NDX; QQQ) is very strong as well and is making new all-time highs along with $SPX almost daily.
The major support level for $SPX is still 4370, although that is beginning to fade into the distance as the Index plows ahead. For now, we are still of the opinion that the $SPX chart is bullish as long as support at 4370 has not been violated.
After bouncing off of support at 4370 last week (the third time that $SPX has found support at that level --meaning it is now extremely important support), $SPX rallied to new intraday and all-time highs. The NASDAQ-100 ($NDX; QQQ) did the same, but the Dow ($DJX) has lagged behind.