Keystone's SPX 150-Day MA Slope Secular Indicator

Keystone's SPX 150-day MA slope indicator must be monitored extremely closely over the coming days.  The markets were in a secular bull pattern into the end of July, then, as the blue circle shows, the slope of the 150-day moving average went negative indicating that the broad markets fell into a secular bear pattern.  The August crash followed. The secular bears have been in undelying control of the secular picture of the markets ever since. But, note the blue circle now, the 150-day MA slope is flattening slightly. Will it turn positive again? If the slope turns positive it is an uber bullish market signal.  This indicator should be monitored along with Keystone's SPX 12-month MA cross, and the NYA 40-week MA cross, both of which are in the same boat, very close to flipping from a secular bear signal to a secular bull, but not yet.

The 150-day MA numbers for the last five days are 1239.24, 1238.58, 1237.92, 1237.39 and 1237.04. If we subtract to find the differences between each move, we see 66 cents difference, then a drop of 66 cents again, then on the next day a drop of 53 cents, then Thursay to Friday, a drop of only 35 pennies. As long as the 150-day MA continues to slope lower and numbers steadily print from 1237.04 lower as they are, the secular bear picture remains in place for the broad markets.  If the 150-day MA slope turns positive, for instance if today's print is 1237.05 or higher, that is a game-change for the equities markets as they shift into a secular bull market. As long as the slope remains negative, broad markets will continue to leak lower in the longer term picture.

Note the upward sloping channel for the SPX from August to present that provides further upside targets but price is finding difficulty in making higher highs. Note the green sideways triangle in play now.  For these patterns, price tends to break out in the area about two-thirds across the triangle (now) which results in a fake-out move, with price returning to the triangle then accelerating out the opposite side. This can occur in either direction.  Currently, price just broke out of the triangle to the upside. Watch for a back kiss to the 1240's where price will decide if it wants to return to the inside of the triangle and collapse out the bottom, or, the back test may be successful with price rebounding strongly and heading upwards. So lots of drama to watch moving forward.

Note Added 12/27/11 at 7:52 PM:  The 150-day MA print today is 1236.71, 33 cents lower than the Friday number. 33 cents is less than 35 cents, the previous interval, so the moving average line slope is flattening.  Check the SPX 150-day MA each evening from here on out.

Note Added 12/30/11 at 6:01 AM:  The 150-day MA prints continue with 1236.71, 1236.23, and 1235.81 for Thursday, 12/29/11.  The 150-day MA slope continues downward, sloping negatively, so the market bears remain in secular control (weeks and months) of the markets.