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The first three-year chart shows NYMO and NYSI are in intermediate-term downtrends. Normally, when the NYMO 50-day MA (red line) reaches negative 20 or lower, SPX bottoms. Currently, the NYMO 50-day MA is roughly zero. Also, when the daily NYSI reaches roughly negative 500, SPX bottoms. Currently, NYSI is above 660.The second three-year chart shows the CPC 200-day MA (red line) continues to reach all-time highs, which is SPX bullish, since the CBOE Put/Call is a contrarian indicator. Also, remarkably, the CPC 50-day MA (blue line) is currently near its all-time high set in Jul, before SPX rose over 200 points.The conflicting signals suggest a period of higher volatility. VIX (in second chart) fell to and traded around 10 over the Jul to Feb SPX rally. Currently, VIX is about 15 and may trade in a higher and wider range. Consequently, SPX may be in a volatile range, e.g. between 1,300 and 1,450 over the next few months. After intermediate-term indicators bottom, SPX may rally to new highs, since sentiment indicators may remain extremely SPX bullish.Free charts available at PeakTrader.com Forum Index Market Forecast category.Also, I may add, the catalyst for an eventual stock market correction may be the collapse of China's economy. Currently, China is producing large volumes of goods with declining prices, although world demand remains high. If world demand falls, it's more likely Chinese output will fall rather than prices declining at accelerated rates (other potential crises, including other factors regarding China, are in the PeakTrader Forum Index Economics category).
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Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.
Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.
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