You may think that after the SPX has had a rip roaring 21% gain in just three months that it could be due for a significant drop. Wrong again bears! On 3/29/19 the 200 day Simple Moving Average (SMA) was at 2756. The 50 day SMA was at 2755. If the 50 day SMA crosses above the 200 day SMA its called a Gold or Golden Cross. Why is this important? Since the major SPX bottom made in March 2009 there have been only five Gold Cross signals, of the five only one failed to cue a significant rally. This happened in December 2015 when after the Gold Cross the SPX rallied only one week then went down until February 2016. Of the four successful signals, the best was in January 2012. The SPX then rallied 69% into May 2015 before a significant peak occurred. The least successful signal was 22% from October 2010 to May 2011
In addition to this quantitative evidence you need to understand what the other traders are doing, in particular the stock fund managers. First, they gauge their performance off of what the SPX is doing - this is one of the reasons why the SPX 200 day SMA is very important. Second, not all fund managers are equal. The best managers were probably loading up on long positions from mid December 2018 to mid January 2019. The poor/mediocre managers were probably selling or hedging, then there's a big SPX rally and they are now under performing. April 1, 2019 is the start of the new quarter, the poor/mediocre managers that will probably use a Gold Cross to buy stocks in the hope of redeeming themselves in the second quarter.
Assuming there's a Gold Cross on 4/1/19 the probability of a multi-month rally is 80%. If this next possible rally is only half as strong as the 22% from the October 2010 signal - the SPX could rally another 11% beyond 2756. This targets SPX 3060 which is very close to 3047, the major Fibonacci resistance I have mentioned in my posts since early 2018.
There's no significant Fibonacci or Chart resistance on the SPX until the all-time high at 2940 the path of least resistance is up. US stocks are seasonally bullish until early May.
Notice the time lapse between 18 Aug and 30 Dec 2015 waterfalls... about 132 days. Doji pattern is similar there was exhaustion gap with strong bullish rally on 29 Dec 15 following two down days, and followed by a bearish engulfing candle. If we get a clear signal like that on Monday it will go down to a second lower bottom than 24 Dec 18... about four months drop-to-drop. The shallow decline from 3 Nov - 29 Dec '15 strongly resmbles the pattern in March '19. It certainly could bull a bit higher but the chart patterns strongly resemble a bear rally between double bottoms. We are currently 95 days into the rally... sell in May and go away!
DaddySawbucks
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Mark, roll left to 21 Dec 2015. Last time the Gold X followed a Death X it resulted in a 2nd panic waterfall cascade, and a lower low. In fact, touching the TL provoked a strong bearish reaction... Only after that lower price double bottomed did the market begin to advance in April 16; with susbsequent retests in June and November 2016. The second bottom test sparked the parabolic climb all through 2017 that broke on 2 Feb 2018. The rest is silence...