SPX S&P 500 Daily and Monthly and NYA NYSE Composite Weekly Charts; Bulls and Bears Battle for Cyclical Market Control

The United States stock market remains in a cyclical bear market pattern but the negativity is being tested as the bulls flex their muscles.

Keystone's three key metrics that dictate whether the US stock market is in a cyclical bull or cyclical bear are not on the same page. The SPX 150-day MA slope remains negative, by a single hair, continuing to call for a cyclical bear market. The SPX 12-month MA cross remains negative (price below the 12-mth) continuing to call for a cyclical bear market. The NYA 40-week MA cross is now in a cyclical bull market pattern (price above the 40-wk).

Thus, it is a mixed bag. For months, the call was easy since all three metrics were calling for a cyclical bear. Now the 150-day MA slope is flattening and may turn higher which would signal a cyclical bull market and the SPX is coming up to possibly test the 12-month MA. This is a critical juncture over the coming days which will determine the fate of the cyclical bear going forward. Either the NYA dies and the cyclical bear is full steam ahead, or, the SPX 150-day MA will begin sloping higher and price will overcome 4086 signaling blue skies ahead and a new cyclical bull market. Choose your poison.

The thick purple line represents the stupid -20% bear market criteria line that television pundits tout since it is an easy concept; -10% is a correction and -20% is a bear market. Keystone likes purple crayons because they taste the best. According to this -20% *sshole methodology, a bear market is tested in May. Stocks recover but then it is a bear market again but only for a few hours, then it is a bull market again. In June, it is a bear market, no a bull, no bear again, you were right, no a bull market, oh I see, no, there's a bear market again, and a bull again, then a bear again, then a bull market for August. Whew. But then a bear market in September then a bull market October, no, bear again, no, a bull, no a bear. In November, a bull market appears again overcoming the -20% deficit for a cyclical bull market. Isn't this the biggest pile of sh...., er, silliness you ever heard?

Back to Keystone's criteria, let's take a closer look. The NYA 40-week MA positive cross occurs 3 weeks ago. Price is coming back down for the back kiss of the critical 40-wk MA at 15206 so it is bounce or die time. A bounce bolsters the idea that a cyclical bull market will dominate for a while and the SPX charts will flip to a cyclical bull as well.

If NYA fails from 15206, however, the cyclical bear market is locked-in and you will see ugly and bloody carnage at Wall and Broad going forward.

The SPX monthly chart remains in a solid cyclical bear pattern at 3934. Bulls need to cross above the 12-month MA at 4086 so they got some work to do. The 10-mth MA at 4014 is shown since this is a key metric for algorithms and old-timer's. If 4014 occurs, price will go up to test 4086.

On the SPX daily chart, note the multiple touches and respect that price shows to the 150-day MA. Do you think this 'lil ole moving average is important? Since this behavior is occurring, you look back and see that the prices in August greatly respected the 150-day MA S/R as well. Therefore, the 150-day MA at 3927 carries clout. Bulls win big above 3927. Bears win big below 3927.

The slope (not price) of the 150-day MA determines the cyclical bull versus the cyclical bear and by definition, prices above the 150 will pull it higher into a cyclical bull while prices below the 150 at 3927 will pull the moving average line lower again.

It  is all on the line over the coming days with the inflation data tomorrow morning (Tuesday) and King Powell on tap Wednesday afternoon.

The following important moving averages are in play;

20-mth MA 4235
100-wk MA 4201
50-wk MA 4119
12-mth MA 4086 (dictates cyclical bull vs. cyclical bear)
200-day MA 4037
10-mth MA 4014 (old timer's key level; 12-mth MA will come)
20-day MA 3987
SPX is at 3934 starting the week of 12/12/22
200 EMA on the SPX 60-minute chart 3934-3935 (bounce or die)
20-wk MA 3931
100-day MA 3930
150-day MA 3927
150-wk MA 3877
50-day MA 3840
200-wk MA 3652

So, now you know what to watch especially the longer-term traders trying to read the tea leaves for 2023. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.