Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stock Market Important Short Term Juncture

Stock-Markets / Stock Markets 2011 Nov 13, 2011 - 05:09 AM GMT

By: Tony_Caldaro

Stock-Markets

Best Financial Markets Analysis ArticleVolatile week ends mixed to lower in world equity markets. After an 18 day, 20.3%, rally from SPX 1075 to 1293 the market has spent the past eleven trading days between 1215 and 1287. Positive economic reports for the week outnumbered negative reports, for the first time in many weeks, two to one. On the downtick: wholesale inventories, import/export prices and the monetary base. On the uptick: consumer credit, the twin deficits, consumer sentiment, the M1-multiplier, the WLEI and weekly jobless claims improved. For the week the SPX/DOW were +1.15%, but the NDX/NAZ were -0.15%. Asian markets declined 2.2%, European markets gained 0.5%, and the DJ World was -0.2%. Next week we have a slew of important economic reports, and it’s Opex week.


LONG TERM: neutral

We continue to remain neutral long term for several reasons. After the market declined in five waves from May11 @ SPX 1371 to Oct11 @ SPX 1075 we identified that important low two days after it occurred. Then as the market rallied, in what appeared to be a B wave retracement rally, it took on the look of an ongoing impulse wave. This was a bit of a surprise as we only expected a rally to SPX 1258, and possibly a bit more, to overlap the first wave of the five wave decline and retrace 61.8% of the decline. We expected the uptrend to be choppy, but it impulsed right up to SPX 1293. See daily SPX chart.

Historical analysis of Primary II waves suggested, once the 61.8% retracement level was exceeded, a potential 12 month bear market could unfold with a Major B wave that could retest, (within -3.5% to +1.0%), the bull market high. This allows this Major B to continue higher, reaching between SPX 1323 and 1383. The implusive looking rally, however, suggests it was either an Intermediate wave A of an ongoing Major wave B, or the bear market actually ended at SPX 1075. In either case we would have expected to see higher prices in the next few months before seeing SPX 1075 again, if at all. However, there is a possibility that Major wave B concluded at the recent high. We’ll get into that in the next section.

MEDIUM TERM: uptrend may have topped at SPX 1293

The uptrend, that started in the beginning of October, first ran into resistance at the Int. iv SPX 1231 high, then the Int. i SPX 1258 low, and finally the series of resistance levels going back several months in the lower 1290′s. This was quite a strong impulsive surge lasting only 18 trading days and retracing 74% of the entire five wave, five month, decline from SPX 1371 to 1075.

We initially started counting this rally as a series of zigzags and have that count still posted on the SPX charts. When it started looking more impulsive that corrective we added a more bullish count on the DOW charts, and switched from long term bearish to long term neutral. Before making the long term bullish/bearish determination we need to observe this uptrend, in its entirety, and the next downtrend. If this uptrend remains impulsive and the following downtrend is corrective we’ll turn bullish. If this uptrend ends in a corrective fashion we’ll return to long term bearish.

After the SPX 1293 uptrend high two weeks ago this market started to turn choppy. We have had a sharp 3 day decline to SPX 1215, a 4 day rally to SPX 1278, a 1 day decline to SPX 1227 and now a 2 day rally to SPX 1267. When the 4 day rally looked corrective and then turned down we went into the defensive mode, posting a potential uptrend high at SPX 1293, and Minor wave 1 and 2 at SPX 1215 and SPX 1273 respectively. To eliminate this count the market will first need to rally beyond SPX 1278, and then SPX 1293. This would suggest the alternate count posted: an Int. wave A at SPX 1293, and an Int. wave B at SPX 1215 with Int. wave C underway. It could also mean that this uptrend is turning choppy and the Major B wave bear market scenario is again in force. Should this occur we would expect the SPX 1075 level to be revisited and possibly exceeded in 2012.

The DOW charts post a more bullish SPX count, with similar short term parameters, where we labeled the SPX 1293 high as the end of Intermediate wave one. Intermediate wave two would be underway now.

SHORT TERM

Support for the SPX is at 1261 and then 1240, with resistance at 1291 and then 1303. Short term momentum ended the week overbought. Short term OEW charts will remain positive as long as the market holds SPX 1250. Should this uptrend continue, the Int. C wave scenario, we have three fibonacci overhead resistance levels ahead: SPX 1298 (Int. C = 0.382 Int. A), SPX 1324 (Int. C = 0.50 Int. A), and SPX 1350 (Int. C = 0.618 Int. A). There are OEW overhead pivots at 1291, 1303, 1313 and then 1363. The historical Major B scenario suggests a range between SPX 1323 and 1385.

If the uptrend concluded at SPX 1293, in the impulsive mode, we have several fibonacci support levels targeted. SPX 1210 = 0.382 Int. i, SPX 1184 = 0.50 Int. i, SPX 1158 = 0.618 Int. i, and SPX 1126 = 0.764 Int. i. These levels are posted on the SPX 60min chart above. The recent rally from SPX 1215 to 1278 retraced 76.4% of the decline from 1293 to 1215. Below is the more bullish 60min count posted on the DOW charts.

FOREIGN MARKETS

The Asian markets were mostly lower on the week for a net loss of 2.2%. All confirmed uptrends with the exception of Hong Kong’s HSI.

The European markets were mixed for a net gain of 0.5%. All are in confirmed uptrends.

The Commodity Equity group were all lower on the week for a net loss of 0.7%. Only Brazil’s BVSP is in a confirmed uptrend.

The DJ World index is uptrending, but lost 0.2% on the week.

COMMODITIES

Bond prices are getting quite close to confirming an uptrend. Bonds lost 0.4% on the week.

Crude has been uptrending since early October and gained 5.1% on the week.

Gold is in an uptrend as well and gained 1.9% for the week.

The USD remains in an uptrend, a volatile one at that, and was flat on the week.

NEXT WEEK

Busy week ahead. On tuesday we have the PPI, Retail sales, the NY FED and Business inventories. Wednesday, the CPI, Industrial production, and NAHB housing. Thursday, weekly Jobless claims, Housing starts, Building permits and the Philly FED. Then on friday Leading indicators and Options expiration. Nothing scheduled, at this time, for the FED. It appears we are an important juncture that can swing either way in the short term. Keep an eye on European markets. Their sovereign debt crisis is driving markets worldwide. Best to your week!

CHARTS: http://stockcharts.com/...

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.


Post Comment

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

6 Critical Money Making Rules