When SPX made an ATH in the first half of 2019, and a higher low around August, it signalled per my definitions that the 3,5 year cycle low was in, and we got a projection of the next cycle high around fall-2021 with a price around 4.500 +/- (with a possibility of a bullish extension into summer 2022 and a somewhat higher price). This was looking like a blow-up phase of the longer trend.
So the 2020 covid-crash was very unexpected per these definitions, and if it “wasnt supposed to happen” we should see a quick return to the “planned” path… which we have. The covid-crash has however made some mess with the shorter cycles. It was supposed to be only a 26week low, but turned into something worse, and it made the 40week cycle low very early (should have been ~June, not March).
So we are back on the projected course, and it may look something like this:
Scenario 1: we are at historically overbought level. Looking at my Norwegian index and historical data since 1983, we should make a top within no later than 5-6 TDs, and get at least a 5% correction into a 26week cycle low around August. Something similar with the SPX. Then another rally probably to new ATHs around October (+/-), and then the 3,5 year cycle has topped out and the price-action during the next cycles will give us a clue about what kind of low we are heading at.
Scenario 2: if we see weakness from here and extending into the fall, that may be a bullish consolidation, allowing this 3,5 year cycle to rally into summer 2022.
So “weakness” the coming months may be bullish, unless the weakness is really bad (real weakness in price and not consolidating). And more bullishness after a quick correction may be “bearish”…
Anyway, the critical period in distinguishing these two scenarios seem to be around Jan-Feb 2022 (what kind of weakness do wee see there)
But first… lets see if we get some kind of parabolic move the next ~week, or some kind of topping formation, or even just “crashing down”. I favor one week of flattening/topping.