SPX -- Weekly

Fundamentals
My primary fundamental indicator is still positive. The growth of monetary liquidity remains in a
downtrend but is not yet negative and short term interest rates have yet to reverse and go positive.
My weekly cyclical fundamental directional indicator has been flat now for a year. This indicates
a continuing economic slowdown and has likely bothered the stock market in the absence of further
QE which sheltered stock prices when it was in place.

Last week's strong rally reflects increased player conviction that an eventual rise in short term
interest rates has been pushed out further in time. The now weaker USD also lifts worry some over
the prospect for even stronger currency translation penalties to corporate sales and earnings.

The combination of global economic expansion and new evidence that excess productive capacity
is being shut in has not yet been strong enough of itself to put cyclical pressure on inflation, but a
weaker USD is lending some support to the oil price and selected other commodities. This factor
is relieving some investor anxiety about offshore economic and financial constraints attributed to
the sharp rise in the USD since mid - 2014. US equities players thus need to watch the direction of the
dollar more carefully than usual.

Technical
The near term weakness anticipated in the 9/26 weekly technical update proved very short lived.
A quickly ensuing rally eliminated much of the short term oversold position of the market and has
brought the SPX right up to occasional resistance at the 13 wk. m/a. SPX Weekly

The weekly SPX is close to a positive trend reversal if it can decisively take out the13 wk. m/a
soon. However, because it is short term overbought on a price momentum basis, an imminent
test of the downtrend in place is far from assured.