Market Update for Week of 10/12 - 10/16

Short term: Bullish

Long term: Bearish

Another up week in the books. S&P500 was up about 1.4%

For the last 7+ months, the market has had one if it's biggest rallies ever. More than 65% in such a short amount of time. While the market continues to be strong, a lot of technical signs are starting to turn around.

The SPX has been showing signs of completing its full wave structure for Primary Wave 2. On the daily, we have retraced nearly 50% of the entire move down, which is common for wave 2's of all degree. On the minor scale, we have room for maybe 1 more wave up, which could take us a little over 1100. The 50% retracement is at 1122. Somewhere between 1100-1122 is a good upside target for now.

There also continues to be negative divergence on the weekly and daily charts. The market is getting weaker as it goes higher. For SPY, there was an unfilled gap at 110.34, we hit 109.72 intra day. This may be close enough for a fill. But if SPX makes it to 1110, SPY should get the complete gap fill.

The US Dollar has been falling for nearly 1 year now. As we know, the US Dollar moves in the opposite direction of the general market. So naturally, the Dollar has been down trending in it's Primary Wave 2, while the SPX is in it's Primary Wave 2 up.

Primary Wave 2(P2) for the Dollar seems to be coming to an end. Which means, P2 for the SPX should also be coming to an end. After this, the Dollar should rally to either test it's highs, or make new highs. Which means, the next move for the SPX should be to either test it's lows of March, or make new lows.

The VIX also moves against the SPX. It's chart looks very similar to that of the US Dollar. But the pattern isn't quite so complete. Maybe 20 is the magic number there.