Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Stock Market Summer Trend Into a Crash

Stock-Markets / Financial Crash Jun 08, 2009 - 02:05 PM GMT

By: David_Petch

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleThe daily chart of the S&P 500 Index is shown below, with upper 21 and 34 MA Bollinger bands riding the index higher while lower BB’s continue to rise alongside the index, along with a potential Elliott Wave count displayed (which has a lower probability of occurrence compared to the other displayed patterns. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in stochastics 1 and 3. If the %K can manage to remain hooked up and cross the %D in stochastic 2, it increases the likelihood that the continued price movement in the S&P 500 index drifts between 900-1000 over the course of the next 1-2 weeks at a minimum before topping out. As the Captain noted and as Elliott Wave charts will later show, there is a chance the markets simply go sideways for the summer before having a fall crash…to risky for most to even attempt playing, so use risk capital and no more than 5% on any given market trade.


Figure 1

The weekly chart of the S&P 500 Index is shown below, with upper 21 and 34 week MA Bollinger bands in close proximity to the index, while the lower 34 MA BB has shot above the 21 MA BB, indicating the mid-term trend is overbought. It is important to note that the 55 MA BB is at 484.99, well below the lows of 2009. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in all three instances. When the %K in stochastic 1 curls down and falls beneath the %D, a top will likely have been put in place…I should point out that it could take 1-2 weeks at a minimum for this to occur.

Figure 2

The monthly chart of the S&P 500 Index is shown below, with all three lower Bollinger bands falling beneath the index. It is also important to note that in 2008, the index fell below the 200 month MA, something that never even came close to happening within the data shown below. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in all three instances. Based upon positioning of the %K in stochastic 3, a bottom should not be expected until early to mid 2010.

Figure 3

The short-term Elliott Wave count of the S&P 500 Index is shown below. At present, it appear that a flat is forming for wave (g), which would signify the end of the rally within 1-2 weeks. However, if the wave structure is going to continue all summer long, then this would be the correct reference point to base the developing wave structure on. Things must be kept rather “loose” at present, because there is no definitive proof to support either event “will” occur. This is a probability game at present and we must sit on our hands to see what the market deals us. There will be a fantastic opportunity to short the market in the coming weeks potentially, so as this wave structure continues to unfold we watch patiently.

Figure 4

The mid-term Elliott Wave count of the S&P 500 Index is shown below, with the thought pattern forming added in early May shown in green. Although the stock market has not followed the pattern to a tee, it has nonetheless followed it “out of phase”. The Degree of this chart is much higher than Figure 4, thereby eliminating all of the potential counts existing at Minute and Minuette Degree. With the present trend, the S&P breaking below 850 would be an early indication that a top has been put in place.

Figure 5

The long-term Elliott Wave count of the S&P 500 Index is shown below, with the thought pattern forming denoted in green. Green lines indicate the thought pattern forming, which implies the count could extend into early fall before declining to at least test the early 2009 lows. As mentioned earlier, the markets could do anything, so keep tight stops if trying to short the market at this point in time.

Figure 6

The CBOE Options Equity Put/Call Ratio Index is shown below, with the S&P 500 Index shown in the background in black and accompanying full stochastics shown below. The put call ratio continues to remain within the confines of a triangle that does not have an apex form until August/September 2009. For this chart, full stochastics having the %K above the %D is an indication of weakness in the broad stock markets, while the %K beneath the %D is an indication of strength. At present the %K is riding above the %D, which is serving as a potential red flag as the S&P continues to rally. Whenever the %K and %D are in close proximity for extended periods of time, it creates the setup for a sharp decline in the market. We are not there yet, but a spike in the put/call ratio in the range of 0.45-0.50 should serve as an indication a top in the broad markets has been put in. For now, everyone continues to skate on the ice path beside the cliff.

Figure 7

The Gold Miners Bullish Percent Index (BPGDM) is shown below, with the HUI in the background (denoted in green) and accompanying full stochastics 1, 2 and 3 shown below in order of descent. The BPGDM continues to rise to nosebleed territory in a sloped manor, unlike the sharp rises seen earlier in the chart. The %K is above the %D in all three stochastics, indicating there still is more room for bullishness to grow before a top is put in place, suggesting the gold stocks are going higher. How higher no one knows,  but this trend could continue for another 1-2 weeks as per strength in the S&P 500 Index.

Figure 8

That is all for today. I will Update the HUI tomorrow AM. Have a great day.

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.

And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

David Petch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules