June 22, 2006
Publisher, Jim Curry
S&P 500 CASH
From previous outlook: "As per the notes from last night on the 10 day cycle, better than 90% of the up phases for this component - even after making the bearish pattern of a lower low - have not seen their peaks made before the 2 trading day mark off the lows, which here would infer above-average odds for a test/move above last week's 1258 swing top, provided of course that the 1219.29 swing low holds the downside. On the daily chart from above, note that the 10 day oscillator has turned down at today's close, which will make the 1237.17 swing low from Monday a key area for the next day or three. Taking that out to the downside, if seen, would invite a run down to the lower end of daily 'swing support' (around 1225 SPX CASH). On the flip side, holding above this same level and taking out today?s 1249.01 intraday high would indicate that another try at the 1258 area or higher is in progress."
Current analysis: Going back to the notes from Sunday night here, the odds favored an early-week decline into support for some test of current 'swing support' on the daily chart, which was seen with Monday's decline to the 1237 region. I noted then that, as long as this swing support range held the downside on a closing basis, that the odds would then shift back for a run to or above last week's 1258 swing top, ideally being seen on a mid-to-late week high - and with last night?s notes suggesting that any break above 1249.01 indicating this test was underway. That was seen early in today's session, with the SPX running all the way up to an intraday high of 1257.96, before reversing off the same and consolidating lower into the closing bell. Volume action in Wednesday's session came in at just over 1.66 billion shares traded, which is a 12% expansion from Tuesday?s levels. And, coming on a day where a higher high was registered, this should indicate that another move above today?s 1257.96 intraday high should still be out there. Since we closed about 6 points off the highs for the session, this would tend to indicate that the reversal lower off the intraday high is thus going to also going to be reversed back to the upside for yet another try at the 1258 level or better.
As per the notes on time, over 90% of the 10 day up phases in the current pattern have not seen their peaks made before the 2 trading day mark, which would also infer that a higher high is still out there somewhere, as the highest peak we have seen on this up phase occurred in only 1 trading day. Current major short-term resistance here is again at the 200 day moving average, which is right now at the 1261-1262 area, and is what I also think is acting as the current upside attractor to price here. That same moving average is also at or near current VTL line resistance on the same chart, of which a daily close above - if seen - would be our top indication that the upward phases of the 45 and 120 day cycles are back in force. Stay tuned.
NASDAQ 100 CASH
From previous outlook: "As long as the lower end of weekly support (around 1529 NDX CASH) holds the downside action on a closing basis, then the odds will favor a test of last week?s 1576 swing top will be seen. So far the lowest low made here was Monday?s 1543.85 intraday low, which was right into this same weekly support zone - which could mean that the low for the week has already been made."
Current analysis: As per the notes from recent days, the odds also favored an early-week decline on this index, with the 1529-1545 region looked for as the approximate price attractor to that decline - and with Monday?s 1543.85 low moving right into that range. The lower end of this area was expected to hold the downside action on a closing basis - and then was also looked for to make a move back above last week?s 1576.79 swing top, as the volume notes from last Thursday night indicated would be seen again at some point. Today?s firm move to the upside hit a high of 1585.88, which thus satisfies this expectation. Volume today came in at 1.91 billion shares, which is a good 21% expansion from Tuesday?s numbers, and thus should indicate that higher highs are still out there.
On the daily chart you can see that the NDX has closed above VTL line resistance, which is now the best confirmation that the 45 day and 120 day cycles have in fact bottomed at the 1511.63 swing low and thus are heading upward. With that, we know that 85% of the time or better that a cycle will make a return trip back to a moving average of the same length at some point before that cycle tops out. You can see that the 45 day moving average is currently just above the 1620 region - and the 120 day average (not shown) is currently at the 1660 area, both which should then act as an upside magnet to price in the weeks ahead - though by no means do I expect it to be a straight shot higher. With the SPX having firm resistance at the 1261-1262 level, what we may end up seeing is a test of this region on that particular index, then followed by another minor correction phase lower with the nominal 10 day component - before then trudging along back to the upside here.
Jim Curry
Market Turns Advisory
Email: jcurry@cycle-wave.com
