Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20
Silver's Massive Undervaluation Relative to Gold Makes It Irresistible - 14th May 20
Bitcoin Halving Passes with no Fanfare, but Smart Money is Accumulating - 14th May 20
Will Job Market from Hell Support Gold? - 14th May 20
The Tragedy Of Missed Covid-19 Opportunities - 14th May 20
Worst Jobs Report In US Economic History - And The Stock Market Continues To Rally - 14th May 20
NASDAQ Sets Up A Massive Head and Shoulders Pattern - 14th May 20
Perceiving Coronavirus as a Disruptive Technology - 13th May 20
Why Financial Trouble Brews on the "Home" Front - 13th May 20
Stock Market ‘Sentiment Event’ Rally Grinds On - 13th May 20
The Fed Now Owns All Markets - 13th May 20
Fruit Trees Gardening to Beat Coronavirus Blues - , Apple, Cherry, Kiwi, Pears, Plums, Grapes, Bananas May 2020 - 13th May 20
Gold Investors Shouldn’t Be Losing Focus - 12th May 20
S&P 500 Bulls Again At Resistance – Now What - 12th May 20
US Fourth Turning Accelerating Towards Debt Climax - 12th May 20
Gold in the year of the Coronavirus Pandemic - 12th May 20
Hi Ho Silver : Away! - 11th May 20
The Great Stock Market Disconnect - 11th May 20
The Big Move In Silver May Be Right Now - 11th May 20
Finding Winners in the Wreckage of the Coronavirus Economic Downturn - 11th May 20
Brave New Corona World – A heated Debate between Steven Pinker and Aldous Huxley - 11th May 20
Coronavirus Catastrophe Stock Market Implications - 10th May 20
US Stock Prices are Ignoring the Economic Meltdown, Wait for it… - 10th May 20
Forecasting Crude Oil: This Method Has Been the Undefeated Champion Since 1998 - 10th May 20
Coronapocalypse and Gold - How High Is Too High for the Yellow Metal? - 10th May 20
The Illusion of Owning Gold - 10th May 20 - Nick_Barisheff
The Financial Crisis Will Continue To Lurk Even If the Lockdown Gets Eased - 10th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Stock Market Correction is Nearly Over

Stock-Markets / Stock Markets 2011 Mar 20, 2011 - 04:42 AM GMT

By: Tony_Caldaro

Stock-Markets

Best Financial Markets Analysis ArticleMarkets, worldwide, had some serious declines early in the week but rebounded by week’s end to lessen the losses for the week. Japan’s Nikkei had nearly a 20% decline in two days but recovered to end the week -10.2%. In the US the SPX/DOW were -1.7%, and the NDX/NAZ were -3.1%. Asian markets overall were -3.4%, Europe markets -2.9%, the DJ World index was -2.0%, but the Commodity equity group was +0.9%. 


US economic reports continue to come in positive. The NY/Philly FED, capacity utilization, the monetary base, the WLEI and BEA leading indicators rose; import/export prices remained positive along with the PPI/CPI; the NAHB was marginally positive, and the weekly jobless claims declined. On the negative side, housing starts, building permits, industrial production and the M1-multiplier all declined, while the currenty accounts deficit remained largely negative. Next week will be highlighted by home sales, durable goods and the Q4 GDP final. Best to your week!

LONG TERM: bull market

Anyone that can read Elliott Wave labeling can clearly see that this is, and has been, a bull market since March 2009. They can also see that we had a five wave bull market between Oct02 and Oct07, and then a three wave bear market between Oct07 and Mar09. OEW quantified every wave and we have labeled them as they have unfolded. Any other counts are simply subjective. Our RSI/MACD indicators continue to display bull market characteristics: mostly overbought and above neutral respectively. This bull market continues to reach similar level achieved during the last bull market, only faster. And, the economy continues to grow as noted by the WLEI at 57.1%: above neutral (50%) is economic growth. This is not a bear market rally.

MEDIUM TERM: downtrend

After a seven month Major wave 1 uptrend, (July10-Feb11), when the SPX rose 333 points or 32.9%, the market finally entered a downtrend and Major wave 2. The downtrend started over the President’s day holiday weekend, when Libya started firing on government protestors and Crude oil spiked over $10/bbl in two days. That was four weeks ago. After a few weeks of generally sideways market activity, an earthquake in Japan and the tsunami that followed sent the equity markets reeling this week.

Despite the two economic shocks and the four week correction the SPX has only declined from 1344 – 1249, or 7.1%. This decline is less than any of the previous corrections during this bull market; i.e. 9.1%, 9.1% and 17.1% respectively. But, nearly longer in time than the first two. In short, we would have expected a bit more price damage at this point in time.

When we review fibonacci retracements for the recent uptrend we find SPX 1217 = 38.2% Major 1, and SPX 1177 = 50% Major 1. Next we review the short term count within the downtrend. With 1344-1294 = Int. A, and 1332 = Int. B; at SPX 1252 C = 1.62 A, SPX 1232 C = 2.0 A, and at SPX 1202 C = 2.62 A. Finally we review the OEW support pivots: 1240, 1222 and 1187. Since the SPX has already reached 1249 we have omitted most of the higher price relationships. The SPX 1177 (50%), 1187 pivot and 1202 (2.62 A) appear to be a worse case scenario. The SPX 1217 (38.2%), 1222 pivot and 9.1% correction appear to be the obvious scenario. The SPX 1252 (1.62 A), the SPX 1232 (2.0 A) and 1240 pivot appear to be the minimum scenario for a downtrend low.

When we review the RSI/MACD activity on the various timeframes. We find that the market has already reached some important oversold levels. Naturally the market can get more oversold over time. For now, however, the prudent thing would be to start looking for a low for this uptrend starting around the 1240 pivot range.

SHORT TERM

Support for the SPX remains at 1261 and then 1240, with resistance at 1291 and then 1303. Short term momentum hit overbought friday, for the first time in over a week, then ended at neutral. The short term wave count suggests the SPX just completed Minor wave 4 of Intermediate C at 1289. We should now get a decline to new downtrend lows to complete Minor 5, Intermediate C and Major 2. Let’s start looking for a low at the OEW 1240 pivot. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower on the week for a net loss of 3.4%. All indices are downtrending except China’s SSEC.

European markets were all lower as well for a net loss of 2.9%. All indices are in downtrends.

The Commodity equity group were all higher on the week for a net gain of 0.9%. Russia’s RTSI and Brazil’s BVSP remain in uptrends.

The DJ World index is downtrending and lost 2.0% on the week.

COMMODITIES

Bond prices (+0.8%) have been uptrending and Bond yields downtrending. The 1 YR rate equalled its lowest level in history this week at 0.21%. The FED is right where it should be.

Uptrending Crude had a volatile week, about a $7.50 swing, and gained 0.3% on the week.

Gold pulled back early in the week and then rallied, gaining 0.1%. Gold/Silver uptrending.

The downtrending USD made new lows for the year this week: -1.5%. The fiat currency debasing continues.

NEXT WEEK

Quieter week ahead. Monday at 10:00 Existing home sales. Tuesday we have the FHFA home price index.  Then on wednesday New home sales. On thursday weekly Jobless claims and Durable goods orders. On friday Q4 GDP and then Consumer sentiment. As for the FED. On wednesday FED chairman Bernanke gives a speech in San Diego. Then on thursday, FED governor Duke gives a speech in Richmond. Best to your week!

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

http://caldaroew.spaces.live.com

After about 40 years of investing in the markets one learns that the markets are constantly changing, not only in price, but in what drives the markets. In the 1960s, the Nifty Fifty were the leaders of the stock market. In the 1970s, stock selection using Technical Analysis was important, as the market stayed with a trading range for the entire decade. In the 1980s, the market finally broke out of it doldrums, as the DOW broke through 1100 in 1982, and launched the greatest bull market on record. 

Sharing is an important aspect of a life. Over 100 people have joined our group, from all walks of life, covering twenty three countries across the globe. It's been the most fun I have ever had in the market. Sharing uncommon knowledge, with investors. In hope of aiding them in finding their financial independence.

Copyright © 2011 Tony Caldaro - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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


Comments

Hector Herrera
20 Mar 11, 20:26
Your Bullish View

Hi Tony,

First of all I want to tell you that I enjoy your charts and analisys very much.

My question is;

As we all know patterns and set ups in the markets are always probable scenarios by nature. As you probably know there is another wave count that places the rally from March 09 as a bear market rally. To be honest looking at both counts from far away, they are both probable. I guess my question is at what point you would consider the bear count to be the right one. What kind of price break on the down side do you need to see.

Thank you


Post Comment

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

6 Critical Money Making Rules