S2 System Status

Although I've not been trading my S2 System for nearly a year now due largely to schedule, I still track its Score a couple times per week to see what it's saying. Currently, key moving averages are in a very bullish alignment and all of my hourly indicators except 1 has reached overbought status based on my way of measuring them. That combination (bullish but near-maximum overbought) gives the System a neutral Score which means one should keep a bullish position but reverse to a bearish position once there is an hourly candle reversal (at 2120 currently and rising with each hourly close higher) by System rules described on my site. The trade would likely only be safe down to the 20/50dSMAs near 2090-2106 or whenever technical indicators reset to short-term oversold.

Dow made a new all-time high today and set a weekly closing high last week which negates some bearish cycle/divergence statistics. SPX made all-time daily and weekly closing highs last week and an intraday all-time high today. The T-Theory Confidence Indicator has now reversed bullish for a few months, so its collapse didn't cause much price damage as SPX merely triangulated since late 2014 working off time instead. A similar setup occurred into Q1 2009 and Q2 2012. The former made a new bear market low but then skyrocketed back up while the latter simply retraced about half of the 2011 correction.

My point is that there is still intermediate-term risk of a sizable correction, but it is looking more and more likely that SPX 1820 is safe for a while and that pivots/price-volume/Fibs near SPX 1960-2000 and 2040 are the likeliest targets. Afterward, new all-time highs would be expected possibly with the final divergences needed to fulfill the long-term warnings for a bear market 80%+ retracement of the old SPX 1576 high. Currently, an 80% retracement of 1576-->2126 would be 1700ish. I just realized SPX 2131 would be 555 points above the old all-time SPX high of 1576. It would be weird if SPX fails there, corrects (maybe 111pts? or Fib 144pts=38% retracement=1975ish) and then rallies to 2242 which would be 666 points above the old 2007 high.

Once May passes, I'll take some time to re-evaluate the discretionary spending signals which had me looking for a significant top and bottom in the March to May timeframe. Good fortune.