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
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter


U.S. Stock Market the New Safe Haven?

Stock-Markets / Stock Markets 2012 Jan 08, 2012 - 12:48 PM GMT

By: Tony_Caldaro


Best Financial Markets Analysis Article2012 starts off with one interesting day, then returns to the inflection point. Overall, US indices did well for the week with the SPX/DOW +1.40%, and the NDX/NAZ +3.05%. Global equity markets were less robust as Asian markets gained 0.9%, European markets lost -0.4%, and the DJ World index gained 0.8%. US economic reports for the week were quite impressive: nine positive versus two negative. On the uptick: ISM, construction spending, factory orders, the ADP, the Payrolls report, the M1-multiplier, plus both weekly jobless claims and the unemployment rate declined. On the downtick: the monetary base and the WLEI declined. Next week we have the FED’s beige book, retail sales and consumer sentiment.

LONG TERM: inflection point

The stock market continues its battle between the deflationary forces of this Secular bear cycle, and the reflationary forces of the FED liquidity cycle. Currently it appears balanced, in the middle, awaiting the next tipping point. While the US economy has been gradually improving, the European economy has been sliding down the slope of hope. Will another European sovereign debt problem emerge, sending equity markets worldwide lower? Or, will the FED come to the rescue, yet again, with another Quantitative Easing program?

When the 2011 European debt crisis first hit, the US market was just concluding its first failed uptrend since Mar 2009. When the crisis hit full stride in July and August markets worldwide dropped around 20%. Then, after some volatile weeks in August and September the EU announced, in the beginning of October, they would recapitalize the banks and resolve the crisis. The markets soared. Four weeks later the SPX hit 1293, peaking on the day of the finalized EU announcement. After that, the markets corrected while none of the plans were enacted. In early December the ECB could wait no longer and initiated LTRO 2 to recapitalize the banks. Now, more than two months after the finalized EU announcement, the SPX has climbed back to just under that eurphoric 1293 high. Since we do not believe the LTRO 2 program is enough to re-establish the bull market. Some additional liquidity will be required soon, or the stock market will roll over and likely resume the bear market.

From an OEW perspective we see two potential counts. We can count five Major waves up from the Mar09 SPX 667 low to complete a Primary wave I at SPX 1371. After that, the market corrected in five waves down to SPX 1075 to complete either Primary wave II, (a 38.2% retracement with an extended flat), or Major wave A of Primary wave II. The three wave rally from that low can be counted as an ongoing ABC Major wave B, or a Major 1-2 and Intermediate wave i. The answer to this dilemna may not be resolved by the waves themselves. But by the actions, or inactions, of the EU and/or the FED and ECB. Keep in mind, if the FED had not acted when they did we may have entered, and still be in, a depression. Massive liquidity ended the Supercycle bear market in Mar09. Additional liquidity was required, since then, to keep the bull market going. Until the deflationary pressures of this Secular bear cycle ends, possibly around 2016, reflationary liquidity is the only offsetting factor.

The SPX displays the count with the bullish outcome, and the DOW the bearish.

MEDIUM TERM: uptrend

Upon review of the technicals after the first week of 2012 we do see improvement. Our smart money indicators are turning positive again for the first time since August. This is important. Weekly and monthly RSI are rising. Eight of the nine SPX sectors are in uptrends. Market breadth has been improving. The NYSE percentage of stocks above their 200 DMA is hitting a higher high, and the VIX has been downtrending. Plus, 15 of the 20 worldwide markets we track are in uptrends, and the commodity market is uptrending. The SPX cleared the OEW 1261 pivot without an immediate reversal. Which is what occurred at the October high. Plus, the NDX/NAZ gapped above that potential contracting wedge formation, we noted last week, and made a new uptrend high on friday. Some of these are welcomed surprises! In response to these positive technical developments, we have removed the tentative bearish green overlay on the SPX daily chart. The inflection point is currently leaning towards a positive outcome. We would rate the probable outcome, at this time, as 55% – 45% bullish.

We have been counting the current uptrend, from the late-November SPX 1159 low, as an Intermediate wave one of Major wave 3 of Primary III on the SPX charts. Major wave 1 looked quite impulsive, uptrending from SPX 1075 to 1293 in less than four weeks. Major wave 2 downtrended, in a corrective pattern, to SPX 1159 by late November retracing, precisely, 61.8% of Major wave 1. The current uptrend, Intermediate wave one, entered its second month on tuesday with the new uptrend high. None of the previous uptrends, from the May SPX 1371 high, have lasted more than one month. This is a positive. Also, the entire decline from SPX 1371 to 1075 lasted five months, and the current rally is three months old. This is a clear deviation from the 2007-2009 bear market scenario: when the market declined for five months, rallied for two, then declined for another ten months.

Currently only the DOW has exceeded its October high. The SPX closed the week about 1% below its October high, and the NDX/NAZ are about 2%-3% below their October highs. Should these lagging indices exceed their October highs the general market will likely gather some upside momentum extending the uptrend.

One last note. When we reviewed our proprietary smart money indicator this weekend we observed something quite unusual. During 2011 every foreign market we track, nineteen, turned negative with long term sell signals. But the US stock market did not. Remember, OEW still has the US stock market in a long term uptrend since 2009. We had noticed the weakness in the foreign markets around mid-year and anticipated a selloff in the US would likely follow. The US market then declined more than 20% into the October low, but ended the entire year flat. The foreign markets were not that fortunate. For now, it appears, smart money has been exiting foreign markets and moving into the US market. One thought comes to mind. Since the FED was the first to act aggressively during the 2008/2009 crisis, the US will be the first market to recover economically.


Support for the SPX remains at the OEW 1261 and then 1240 pivots, with resistance at the 1291 and 1303 pivots. Short term momentum ended the week around neutral. The first rally to SPX 1267, after the November downtrend low at SPX 1159, was clearly impulsive and we labeled it Minor wave 1. The pullback that followed, to SPX 1202, retraced 61.8% of that rally, was clearly corrective, and we labeled it Minor wave 2. The current rally from that low also looks impulsive, and we have been labeling it with the subdivision Minute waves of Minor wave 3.

At tuesday’s SPX 1285 high we can count five waves up from the 1202 low. This suggests several potential short term counts should the uptrend continue. First, Minute wave five will subdivide and extend. Second, the five waves up was only Minute wave one, and the recent 20 point pullback, the largest of this rally, was Minute wave two. Third, Minor wave 3 has completed, and the market is currenctly in some sort of Minor wave 4 triangle. We’ll favor the first scenario for now. If the uptrend peaked at SPX 1285. Then it would appear the uptrend was an ABC rally off the November SPX 1159 low, and a five wave downtrend should follow to retest that low and form a larger ABC flat, ending Major wave 2.

Short term OEW charts have remained positive for almost three weeks now. Short term support is at the 1261 pivot, 1250, and then the 1240 pivot. Overhead resistance is again at SPX 1278, then the 1291 and 1303 pivots. With the narrow range of SPX 1265-1285 last week, the market should tip its hand quite early this week. Should the SPX clear 1285 early this week, the uptrend continues. Should the SPX break below 1265 early this week, a downtrend may be underway. Best to your trading!


The Asian markets were mostly higher on the week for a net gain of 0.9%. China, Hong Kong, India and Singapore remain in downtrends.

The European markets were mixed on the week for a net loss of 0.4%. All are in uptrends.

The Commodity equity group were all higher on the week for a net gain of 2.7%. Only Russia is still in a downtrend.

The DJ World index is uptrending and gained 0.8% on the week.


Bonds remain in a narrow range uptrend, but lost 0.3% on the week. The 10YR closed out the week under 2.0% again, while the 30YR ended just above 3.0%.

Crude remains quite volatile and is uptrending yet again. It gained 2.8% on the week.

Gold has been rallying off the $1524 low a week ago thursday. The rally looks impulsive, volume has been good, and it has already risen $108 from that low. It gained 3.4% on the week.

The USD continues its uptrend from the July low at 73.42 (DXY). It gained 1.3% on the week. We believe our long term scenario for the major currencies continues to unfold. The USD is now in a long term, seven year, ABC bull market. The EUR, GBP, CHF, CAD and JPY all appear, some confirmed and others not, in long term ABC bear markets versus the USD. Will update this report soon:


Monday kicks off the economic calendar with Consumer credit at 3:00. On tuesday we’ll get Wholesale inventories, then on wednesday the FED’s beige book. Thursday provides weekly Jobless claims, Retail sales, Business inventories, and the Budget deficit. Then on friday, the Trade deficit, Export/Import prices, and Consumer sentiment. The FED has one speech scheduled: friday at 11 AM FED governor Duke speaks on regulations and credit availability. Best to your week, and have a healthy and prosperous New Year!


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 - 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