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Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Stocks Bull Market Swing Juncture?

Stock-Markets / Stock Index Trading Nov 15, 2009 - 12:41 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleIn Britain the big story of the week was concerning Gordon Browns spelling mistakes riddled condolence letter to the mother of a soldier killed in Afghanistan which was publicised vocally by the Sun newspaper and Sky News. However the real story behind this is the brewing war between the mainstream media represented by the likes of Rupert Murdoch's News International and the internet represented by Google which allows access to a near infinite alternative sources of information.


The Mainstream media wants laws to restrict the free information market and thus by electioneering on behalf of the Conservative Party, News International is seeking favourable policies on both the state media and internet new media especially in advance of charging a fee for their currently free online content.

However at the end of the day this is a battle that the mainstream press cannot win as the New Media increasingly becomes more sophisticated which in many cases is already delivering better quality of content then the so called premium content pumped out by the mainstream press which usually tends to be a regurgitation of press releases as the analysis of Telegraphs coverage of UK house prices illustrates.

Financial Market Trends and Forecasts Update

November 1st's in depth analysis (Stocks, Dollar and Gold Bull Markets Inter-market Analysis) gave updated projections for key markets into the end of 2009 and early 2010 as summarised below:

Gold Targeting $1200 by March 2010 : $1,119 ($1,046) + 7%

Gold is performing strongly. The Bull scenario remains in tact though a near term correction targeting $1060 seems likely.

Dow Targeting 10,350 to 10,500 During December 2009 :10,270 (9,712) + 5.7%

Stocks continued their rally at the start of the week, with the S&P joining the Dow by busting the bear calls emanating form the October highs and achieving a Dow high for the week at 10,342, a touch away from the target zone.

Using mid prices of the target ranges gives a potential of +155 (10425) to the upside against -720 (9550) to the downside, therefore the potential risk far out weighs the reward as the quick analysis concluded following Mondays close, therefore for traders who are long it would be wise to bank profits, pending outcome of what looks like an imminent correction. Remember trading is risk/reward game, where the reward must always outweigh the risk to win in the long-run.

Looking wider a field, I see a series of international indices putting in a lower low during early November and now implying a lower high as well, this strengthens the view that 10,342 as a high potential of being a swing juncture and confirms long positions under these circumstances are risky and do require an immediate resumption in the up-trend to clear nearby buy triggers.

Dow Trading - The nearest SELL trigger is at 10160. The nearest confirming BUY triggers are at 10,310 and then importantly at 10,345. As mentioned earlier upside looks very limited where 10,345 would target 10,425 to 10,500. On the short side 10,160 first targeting 9950 to 9900.

USD Targeting 84 during December 2009 : 75.23 (76.36) - 1.5%

The U.S. Dollar scenario remains on life support. The previously stated buy trigger of 77.50 remains unfilled. Now a nearer Buy trigger at 77.00 has been generated by recent price action.

How did Robert Prechter's 2009 Forecasts Perform ?

My recent article on Nouriel Roubini's 2009 track record resulted in a number of emails asking me to take a look at other popular analysts. However it is not something that I want to get into as Nouriel Roubini was a one off exercise for an example of why it is dangerous to have a perma-view in denial of the actual facts as observed in the market price action.

However, back in April 09 Robert Prechter made available virtually all of his key forecasts and analysis for 2009 for multiple markets in a 120 page ebook titled Global Market Perspective. The ebook is apparently STILL available! Which enables readers to make up their own minds against what has subsequently transpired during the past 6 months.

How to download the forecasts ebook

1. New users of EWI services, Register your email address on the ebook page (IGNORE THE DEADLINE DATE),

2. New and existing members now go to the ebook page and on the right hand side is the link Already a Club EWI Member? - Which will automatically download the ebook (I have tested this many, many times and it does work!).

Source: http://www.marketoracle.co.uk/Article15058.html

Your stock index analyst.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

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The Market Oracle is a FREE Financial Markets Forecasting & Analysis Newsletter and online publication.
(c) 2005-2009MarketOracle.co.uk (Market Oracle Ltd) - The Market Oracle asserts copyright on all articles authored by our editorial team. Any and all information provided within this newsletter is for general information purposes only and Market Oracle do not warrant the accuracy, timeliness or suitability of any information provided in this newsletter. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We recommend that independent professional advice is obtained before you make any investment or trading decisions. ( Market Oracle Ltd , Registered in England and Wales, Company no 6387055. Registered office: 226 Darnall Road, Sheffield S9 5AN , UK )


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Simon
16 Nov 09, 18:27
Dow Trading

Dow hit 10425, whats next ?


Nadeem_Walayat
16 Nov 09, 20:20
Dow Trading Update

Hi

Its not my intention to turn marketoracle into a short-term tradign signals site.

However as you asked -

The Dow straight from the open triggered both longs that propelled the Dow to the target of 10,425.

At the close the triggers for next days trading are -

BUY continuation - 10,435 for 10,500

SELL 1 - 10,335 REVERSE.

SELL 2 - 10,225

SELL 3 - 10,160 To Target 9950.


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