ST Outlook – S&P 500

The S&P 500 has been playing out exactly as forecast in last week’s Sentient Trader Outlook. Price formed a peak of the 40-day cycle at 1229.50 on 31 August, and then turned down towards the 40-day cycle trough.

SP500 (data to 6 September)

We are now expecting the 40-day trough, and then a move up which will most likely be brief and disappointing, as shown by the low-hanging red-filled projection box. The underlying trend is fairly strongly down (although neutral considering only the 80-day and 20-week cycles), which is why the move up is likely to disappoint. Price is caught up in an FLD congestion pause zone, and so it might experience a bit of a kick up when it breaks free of that (which is why the upwards projection is fairly wide-ranging), but the underlying trend will soon bring it down again.

It is possible that the 40-day trough was formed yesterday as price dipped into the target zone (in terms of price and time).

SP500 up to 6 September

The trough will be confirmed when the median price crosses one of the FLD or VTL levels shown on the above median-price chart.

About David Hickson

I have been trading for over 20 years, but only had any success after discovering Hurst's cyclic principles. Unable to find any software to speed up the analysis process I created Sentient Trader software, which now pretty much does all the analysis for me. I am a film maker and a TV director, but nowadays I mostly provide consultation services to professional traders and fund managers, helping them to integrate Hurst analysis into their trading. I'm South African and live with my family in Italy.

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