“Eight miles high
And when you touch down
You’ll find that it’s stranger than known
Signs in the street, that say where you’re going
Are somewhere just being their own.” Eight Miles High, The Byrds
Historically, the SPX has traded above its 200 dma during 71% of all trading days.
When the index is above its 200 dma it has historically remained above it for an average of 131 trading days. During this time, the SPX has traded at an average premium to the 200 day of 7%.
Currently, the SPX has traded 143 trading days above its 200 dma since reclaiming it on May 12, 2025.
Notice the index gapped above it as if to put an exclamation point on what was going to follow.
Then it successfully backtested its 200 dma 9 trading days later to seal the deal.
The SPX is currently around 11% above its 200 dma.
So it’s stretched in both price and time.
That doesn’t mean it can’t get more stretched. But, the higher it goes and the longer it goes without a test of the 200 dma, the likelihood is when Mean Mr. Reversion shows up he will be wicked…ie, the test will be quick and dirty.
The text reads:
Currently the SPX 200 dma is at 6188 and moving up slightly over time.
Notice how a test in the near future near this 6190 region also ties to a test of the Feb 2025 high of 6147.
I drew a trend line connecting the tops in January/February 2025 that also ties to this 6190 region over coming months.
A possible one year high to low cycle hits in February 2026.
As well 180 degrees from the important July 31 Key Reversal/August 1 false breakdown is the beginning of February 2026.
90 degrees from the October 29 SPX ATH (still) is this same late January/early Feb time-frame.
Something is going to play out into this time frame. A low or a high.
From my perspective I think the likelihood is this time frame proves to magnetize the market lower.
In the daily SPX below I connected the highs going into the Oct 29 all-time high.
Notice this trend line catches the high before the low in March 2025.
Then I paralleled a line off the April 7 low. It currently ties to the 5900 region—well below the 200 dma. By February the line will be more in sync with the 200 dma.
But notice how the 5900 region ties to the breakdown region from Jan/Feb 2025.
While the SPX is a sleigh bell from a new high, notice how the pattern that eked out a new high in Feb 2025 before collapsing mirrors the current pattern.
In January 2025 there was a false breakdown (red arrow) prior to a new high.
On November 20/21 we got a false break/undercut before a spike higher in the last week.
Will it produce a nominal new high?
Let’s drill down to the action since the October 29 ATH.
I created a trend channel (magenta) by connecting the Oct 10 and Oct 20 spike lows
I then paralleled a line off the Oct 29 high.
That line is just above current prices at 6900—20 points below the all time high.
It’s a stones throw from Wednesday’s close.
It certainly seems like the line will be struck/eclipsed.
It’s what happens from there—like in Feb 2025 that will tell the tale of the tape.
40 days from a high is the last pivot high in the Gann Panic Zone.
This is Dec 7 counting from the Oct 29, 2025 peak.
This ties to the big spike high around October 4, 1987 prior to the Oct 19 crash.
It ties to the last pivot high in mid-October 1929 before the October 24, 28 and 29 crash days.
This Dec 7 time-frame squares out with 692 (6920). The all-time high.
Amazing time/price/pattern synchronicity potential.
I think there is a strong setup we get a low in mid-Feb squaring the Oct all-time high.
In sum, the 200 day is long overdue to be tested.
It could occur at any time between here and the one-year cycle on Feb 19, 2026.
Interestingly, Feb 19 squares out with 620 (6200) in the region of the 200 DMA over the next few months.
A drop to this region satisfies a “prior resistance becomes new support setup”…just like the April drop satisfied a test of the January 2022 peak.
The question is will the second mouse get the cheese for the Bear …with breakage below the Feb 2025 top in league with bearish cycles due to exert their influence in 2026.