Conclusion, Investment Implications, Strategy
Almost one hour into today’s trading session, the the benchmark S&P 500 (SPX) is testing primary Tactical support at 4182 to 4168. This is where the US broad market index’s 2021 Tactical uptrend must resume if still valid. It would take a Negative shift in our Tactical models (Asbury 6, Correction Proteciton Model) accompanied by a decline by SPX completely below its 50-day moving average to help confirm that a long overdue corrective decline is underway.
Analysis
A little less than an hour into today’s trading session, Chart 1 below shows that the benchmark S&P 500 (SPX) is testing primary Tactical support at 4182 to 4168, which represents the 50-day moving average (minor trend proxy) and the Jun 3rd low. This is where the 2021 Tactical uptrend must resume if still valid.
Chart 1
Meanwhile, Table 1 below shows that, through Jun 17th, four of the Asbury 6 constituent metrics are Positive (green). Four or more metrics in one direction, either Positive (green) or Negative (red), indicate a directional bias. The “A6” model itself has been on an overall Positive status since May 27th.
Table 1
It would take a Negative shift in the Asbury 6, an accompanying shift to Risk Off in the Correction Protection Model (CPM, our other Tactical model), and a decline completely (the entire daily trading range) below the 50-day MA in the S&P 500 to help confirm that a corrective decline is underway. The latter of those is particularly important right now because the 50-day MA has been tested and held 5 times since Jan 29th and the market is clearly focused on it and the “buy the dip” mentality that goes with it.