Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Yikes, Was That The Top In The Stock Market ?

Stock-Markets / Stock Markets 2011 Jun 13, 2011 - 05:00 AM GMT

By: Bob_Clark

Stock-Markets Best Financial Markets Analysis ArticleMy cyclical model says to expect a rally in the stock market soon. We have fallen for six weeks in a row and the media patter is starting to turn bearish.

The question is, if we do rally, is it the end of the decline.


In my last article in April, I said the SPX had one last run to a new high left in it before it would roll over in May. I called it a "getting blood from a stone" trade.  In it I predicted the top and the subsequent decline perfectly.

Perfect short

At the time the buzz from the experts was that we had an inverse head and shoulders pattern set up and it projected to at least 1430 on the SPX.

When it comes to using patterns to trade, I take a different view than most traders. In my opinion, if a pattern is obvious, it is because the Fat Boys want it to be seen.

For example, if you remember last summer, the talk was that we had formed, or were in the process of forming a large H&S top. Anytime I see the media jump on the obvious, my trader senses start to tingle. I know that a profitable trade is coming in the opposite direction.

There will be more talk of head and shoulders as time passes, because we seem to be forming one now.

The price is returning to the Japanese tsunami low which was made in March and a bounce here seems likely. If we do bounce, the market will begin forming the right shoulder of a perfect H&S picture.

Whether there is a head fake down out of it once it has formed, remains to be seen, but it works with my timing model.

Cyclical outlook

I have included a chart of the SPX index and on it I have marked the H&S patterns. I have also drawn the different cycles that are effecting the price of the SPX at this time.

We see that two important cycles are now exerting downward pressure. The 1 year cycle only has another month or so until it makes it's next bottom. Right now it should be going hard down.

The 4 month cycle is a very dominant one and it looks like it has rolled over and is going hard down as well. It has one more month before it bottoms. That leaves the 1 month cycle and it is in a position to provide some lift over the next week or so.

The lift which the 1 month cycle provides and the rally it creates, may be truncated. The downward bias of the two larger cycles should overpower it.

Shifts happen


When you look at the chart, you will notice how the 4 month cycle shifted. The 4 month cycle is a reliable one but even it can shift. I never trade solely on cycles. They are great for giving a heads up to an opportunity. Sometimes they seem magical in the way the market follows their lead but I still use a triggering method that must confirm the trade. If prevents losses when a shift occurs.

I mention shifts because the 1 year low is due in less than one month and it can bottom early or late. We need to be vigilant.



Counter trend
The fact that we went up from last July until May, is telling us that there is strong underlying demand for stocks. That is known in cyclical analysis as late translation and it usually means the larger cycles are still pushing up. We also have to factor the presidential cycle into the equation. In the third year of a presidential cycle, we have only had one down year since the 1940's. We can go down in the middle like this but we should be back near the highs as the year end approaches.

Bottom line
The lift from the 1 month cycle, combined with the fact that we are oversold, will give a bounce that should last a week or two. How high it goes will give us some clues about the strength, or maybe I should say weakness, of the larger 4 month and 1 year cycle.
I will be covering shorts and use the next long trigger to set my bias for short term trading, because there is always a chance we make the key 1 year low now. If not, we may not get much above 1300.

I think many believe we will hold the 1250 level but there is still one month before we make the nest of lows that should signal the start of the next up leg. It is an obvious support level and the Fat Boys may use it as a trap. Then the surprise may be to the down side.
The bullish consensus has shifted from extremely bullish, toward neutral but it is still not nearly bearish enough to confirm a bottom.



Do it yourself
Successful trading requires an understanding of how big trading houses like Goldman, use the markets to pick the pockets of funds and individuals. I offer courses and a comprehensive 5 video set, which takes you step by step through the program they use. When you have learned their trading algorithms, you will always be profitable, in whatever time frame you wish to trade.

Leave the driving to us
Successful money management requires focus and constant attention. Many do not have the time required, nor the desire to acquire the skills.

I have reunited with my former trading partner and now have room for a few new clients in my high return, managed account program.
It offers several very attractive features.

No fees, other than a percentage of profits. Minimum 10 % annual return, or no fees at all. Your money never leaves your account and we never have access to it.

You monitor performance daily. You will see results immediately.
Two managers with over 30 years experience trading S&P futures professionally.

Bob Clark is a professional trader with over twenty years experience, he also provides real time online trading instruction, publishes a daily email trading advisory and maintains a web blog at www.winningtradingtactics.blogspot.com  his email is linesbot@gmail.com.

© 2011 Copyright Bob Clark - 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.


Post Comment

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

6 Critical Money Making Rules