In early November, both small caps and mid caps took the lead, but they have since paused. Recently, the mega caps have regained leadership, with Apple, Google, Meta, and Microsoft all making sharp moves to the upside. This has contributed to a recent uptick in the S&P 500. On the upside, we have short term resistance levels between 6,073 and 6,176.
The next 20 trading day cycle low is expected on December 7 (±3 trading days), and the dominant cycle trough is due in late May to June of 2025. The market is clearly in a rising phase, with the weekly trend firmly up. Only a drop below the 5,700 low would shift the market from a bullish cycle structure to a bearish one. On the short-term S&P 500 chart, the current setup resembles Apple’s chart: a bullish, right-hand translation throughout nearly the entire rally.
Now there is this very narrow window around December 7 for a pullback. The downside base case would be between 6,025 and 5,963, followed by another move to the upside for a higher high. Overall, this remains a very bullish market during a bullish seasonal period, and fading the trend is not advisable at this time.
