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Table of Contents

• Market Summary

• Technical Analysis

• Sentiment

• SPX Analysis

• NDX Hurst Cycles Analysis

• VXX Insights

• META – Is This It?

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Market Summary

The market is in the peak zone and has satisfied all targets. It is “allowed” to pull back now. At least “some kind” of a top is forming.

Based on my expectations of market topping, the game should be raising cash, selling the rip (STR), or “take your money and run,” whichever you prefer.

Technical Analysis

SPX daily and weekly technical issues that we reviewed in the past wave red flags about a pending correction in the intermediate- and long-term.

On Thursday, we said: “Ideally, the present bounce should close the gap to 4,921 from yesterday and possibly make a slightly higher high. But I get reminded that sometimes, around major tops, things are not ideal.”

Indeed, indexes pushed to a slightly higher high. But it is worth repeating “SPX has satisfied all up (cycle) targets for medium- and long-term cycles…”

After the last pullback, SPX (and similarly NDX) generated the 10D cycle target that was immediately satisfied on Friday, as shown in Figure 1. No additional up targets exist.

Figure 1 represents one of the analysis methods we use for the premium content (other methods include time cycles for turning point estimation, price projections using converged moving averages (CMAs), Hurst cycles, Elliot Wave Theory, and regular technical analysis.)

Specifically, Figure 1 corresponds to the forward line of demarcation (FLD) method. The FLD is the price shifted by half the cycle period. The gray band in Figure 1 is the FLD band, where the left and the right boundaries correspond to typical cycle period variations.

When the median price (cyan) crosses the FLD band, it generates a price target for the corresponding cycle. For example, in Figure 1, the SPX gapped up on Friday above the FLD band and generated a target of approximately 4950-4970 from Wednesday’s low.

Market Internals are weak despite major indexes' 2-day strong “beach ball” bounce. Figure 2 shows the daily NDX technical chart with the advance/decline (A/D) line in the top window.

The A/D line has been lagging the price for several weeks, indicating weak market internals. The strong rally in NDX on Friday was accompanied by a declining A/D line.

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Sentiment

CNN Fear and Greed pulled back to greed from extreme greed. To see all the components of the Fear & Greed Index, click the link:

https://www.cnn.com/markets/fear-and-greed

After a 2-day relentless rally, the short-term OPTIX bounced nicely (components include indicators like the price oscillators, cumulative tick, put/call ratios, etc.).

However, despite a strong rally on Friday, it refused to go above the redline into the “overbought” region. Some investors and traders might be getting more cautious, see Figure 3.

Is there more fuel in the tank? Is everyone on board? If the latter, as the investor sentiment, reaches historically high levels, then the stock market could be vulnerable. But remember that the sentiment indicators are not timing signals per se. They are more like descriptors of the state of the market.

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