Market Analysis Summary

The S&P 500 Cash Index closed at 5459.10 on July 26, 2024, with weekly projected resistance at 5522 and support at 5328. The index reached a high of 5585.34 on Tuesday before declining sharply, closing the week down 0.8% at 5459.10.

Multiple cyclical trends are currently influencing the market. The 45-day and 90-day cycles have turned bearish, while the 180-day and 360-day cycles remain bullish. These conflicting cycles suggest a period of short-term volatility within a longer-term upward trend.

The market is expected to continue its current downward movement into early to mid-August, potentially reaching the 70-day moving average. This correction is anticipated to be countertrend, likely holding above the mid-June low of 5327.25.

Following the expected August low, the market is projected to rally into mid-September, potentially surpassing the recent high of 5669.67. However, if the 5327.25 level doesn’t hold, the September rally may be limited and fail to reach new highs.

The larger 180-day and 360-day cycles suggest a bullish trend continuing into late 2024 or early 2025. Statistical analysis indicates a potential upside target for the S&P 500 between 5743 and 6064, with 6000 serving as a key resistance level.

Market breadth indicators present a mixed picture. The NYSE advance/decline line made a new high, which is bullish for the longer-term view. However, the Mid-Term Breadth index has shown a bearish divergence, supporting the idea of a near-term correction.

Sentiment indicators suggest a potential buying opportunity, with the market sentiment index in “buy” territory. However, commercial hedgers have increased their short positions, which could be interpreted as a bearish signal.

Technical indicators remain largely bullish. The 50-day moving average is well above the 200-day average, and the 200-day average continues to rise. These factors suggest that any near-term declines are likely to be countertrend moves within a larger bullish framework.

The Bradley indicator points to a potential low around August 19th, aligning with the projected 45 and 90-day cycle trough. This could be followed by a high around August 29th and another low near September 9th.

The presidential cycle suggests the potential for weakness from early September to mid-October, followed by a strong year-end rally of approximately 13% or more.

Looking further ahead, the market is expected to continue its upward trajectory into late 2025 or early 2026, potentially seeing gains of 30% or more before reaching a longer-term peak aligned with the four-year and presidential cycles.

The overall outlook suggests short-term volatility with a downward bias into early-to-mid August, followed by renewed strength into September. Another decline may occur into October before a strong year-end rally. The longer-term trend remains bullish into late 2024 or early 2025, with potential for significant gains over the next 18 months.