S&P 500 E-mini Futures 1st April 2020

S&P 500 Primary Cycles

We can see the Monthly Charts on the left and the Weekly Charts on the right.

You will notice that the levels don't match exactly, that's because the Weekly close doesn't happen until the end of the week, which confirms the levels.

For example, Today we start the new month of April, but in the Weekly charts, April won't start until next week, therefore there can be a lag of 3-5 days before the next move.

We can see that the S&P 500 has stalled below the 2020 lows @ 2637.

S&P 500 Weekly & Daily Charts.

History suggests declines on average in the next two trading sessions after such a big move but then over subsequent six weeks equities offer cumulative returns of up to 6% on average. Previous Report

 I would begin to look for a counter-trend rally upwards, from 2160 and as high as 2770 (50% of the range from highs) (9 days ago)

There are so many resistance levels in the Above charts, that I can't see the S&P 500 going higher than 2770 (Weekly highs 2774)

March lows 2743  April 50% level @ 2704

Even though I'm expecting lower lows in 2021,  Markets could remain range bound between the 100% lows around 2160/2267  & 2743/70 for the next 6 months.

S&P 500 EMINI FUTURES 28TH MARCH 2020 REPORT

E-MINI FUTURES PRIMARY & WEEKLY CYCLES

I would begin to look for a counter-trend rally upwards, from 2160 towards 2641 and as high as 2770 (50% of the range from highs)

Once than happens, then I will be looking for the next sell off, as it begins a trending period towards new lows in 2021 (long term buys)

We've seen a major counter-trend rally this week from 2174, stalling at 2617.

2770 is approx 50% of the range, but I'm having a hard time seeing it break 2743, the March lows

(random resistance 2697)

I still believe there will be a massive sell-off from the 3rd Quarter & 4th into new lows in 2021.

Let's look at some history....

Thursday's close in S&P 500 marked a 17.6% gain in three trading session something we haven't observed since the 1930s in a testimony to how volatile markets have become during this COVID-19 outbreak. We have looked at previous big moves and what S&P 500 did subsequently. History suggests declines on average in the next two trading sessions after such a big move but then over subsequent six weeks equities offer cumulative returns of up to 6% on average. Over a three-month horizon the outcome range is massive so investors should be careful about taking bold positions.

Thursday's close in the S&P 500 Index marked a 17.6% gain in three trading session turning it into the 6th biggest such move since early 1928. With aggressive policy moves and a period of optimism it’s worth pondering where equities will go from here.

The big upward move in S&P 500 contains information of confidence just as big moves contain information about panic and despair. But is a big move an indication of further gains? To get enough samples to conclude anything we analyzed all future paths in S&P 500 over three months following a 10% gain or more in three trading days. There has been 36 cases of the S&P 500 Index moving this much since early 1928. We find 32 of these observations in the period 1929 to 1939 and the remaining four observations during 2008-2009.

The numbers suggest mean reversion on average, that’s lower equities, in the first two trading days following such a big move up in equities. Six weeks out we observe more path leading to gains and on average 6% gains over six weeks. Over a three month horizon there are as many profitable as unprofitable paths but the distribution of cumulative returns are skewed towards positive returns.

The biggest 63-day trading day return is 74.4% and the biggest negative return is -36.8%. So history is telling investors that such as big move is succeeded by an extreme range in outcomes.

This means that investors that put on long positions here will have to actively manage the position unless they are willing to accept a potential 36% drawdown from yesterday’s close.

S&P 500 E-mini Futures 21st March 2020

S&P 500 E-mini Futures Primary & Weekly Cycles

 We're in a 2 year BEAR market, that often sees extensions towards the 100% range at 2160 (previous Reports)

Didn't reach resistance levels from the March low breakout at 2745, but the Market is heading down into 2160.
 It shouldn't spend too much time below 2160 over the next 3-months.

I would begin to look for a counter-trend rally upwards, from 2160 towards 2641 and as high as 2770 (50% of the range from highs)

Once than happens, then I will be looking for the next sell off, as it begins a trending period towards new lows in 2021 (long term buys)

S&P 500 E-mini Futures 14th March 2020

S&P 500 Primary & Weekly Cycles

That was a wild ride this week, but has all the negative news now been factored into the Market?

Primary lows for 2020 are currently supporting the market.

2617 is once again seen as a random support zone.

random resistance zones are around the March lows @ 2745

Resistance 2820

Long terms 2 year down trend towards 2160

(READ AUS MARKET REPORT)

S&P 500 E-mini Futures 10th March 2020 Report

S&P 500 Primary & Weekly Cycles

If we look at the Weekly Cycles, there's a break and extend patterns that could see price move down into the March and weekly lows @ 2743-2761  And as low as 2617

However, the 2020 50% level at 2976 might not allow that to happen.

Resistance the March 50% level and also the 5-day highs (Previous Report)

TEXT Book Patterns in the S&P 500...

Support at the 2020 50% level, counter-trend rally into the 5-day highs and then the next push down from the MARCH 50% level towards 2617

There's more weakness to come.

Random support 2617, which could see another counter-trend move back towards the 2020 50% level (Major Resistance) on any stimulus announcement.

However, we're in a 2 year BEAR market, that often sees extensions towards the 100% range at 2160