J Clinton Hill submits:

Looking at the S&P 500’s performance on a quarterly basis and its price pivots is a fairly reliable gauge for the market direction. Each quarterly period allows ample time to process and assess economic data trends, quarterly earnings reports, and investor sentiment towards risks.

In general, quarterly price reversals, such as the positive 2nd quarter performance (see chart below), should not be taken lightly. From a technical analysis perspective, reversals indicate a deceleration in momentum. Fundamentally, they may also signal economic inflection points. Of course, such pivot moves do not always guarantee a successful bullish or bearish reversal as the primary trend dictates market direction.

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