Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stocks Bull Market Continues

Stock-Markets / Stock Markets 2012 Jan 23, 2012 - 03:11 AM GMT

By: Tony_Caldaro

Stock-Markets

Best Financial Markets Analysis ArticleThe US rally extends to three up weeks in a row. While volatility has virtually disappeared this new year the market continues to work its way higher. For the week the SPX/DOW were +2.20%, and the NDX/NAZ were +2.75%. Foreign markets also joined in, with Asia and Europe both +3.10%, as was the DJ World index. Economic reports for the week were biased to the upside: 8 to 5. On the downtick: the PPI, housing starts, building permits, the Philly FED and the M1-multiplier. On the uptick: the NY FED, industrial production, capacity utilization, existing homes sales, the NAHB, the monetary base, the WLEI and weekly jobless claims improved. Next week, the FED meets tuesday and wednesday, then Leading indicators and Q4 GDP. Best to your week!


LONG TERM: bull market

After a volatile spring and summer, that threatened to push the world’s economy into another economic meltdown, the markets and economy have recovered in the fall and winter. Pledges from the Eurozone to stabilize the sovereign debt crisis in early October helped put in the market low. Then the ECB’s recapitalization of european banks with LTRO 2, in early December, helped to keep the liquidity engine running. This was especially important, in this deflationary period, as the FED had shut down their QE 2 program in June. Then, after a “wait and see” market inflection point in December. January has signalled an all clear to the upside. Our technical indicators and the market’s activity suggest the bull market of March 2009 is back.

While the B wave, of Primary wave II, scenario is still possible. A glance at the monthly RSI suggests this is becoming less and less probable. Notice the previous two bear market B wave rallies stopped at the neutral line: red arrows. This advance, from the SPX 1075 low, did stall at that level for a while. But has broken clearly through it during this month’s advance: green arrow. With only 7 trading days to go in the month, this is a bullish sign.

The weekly indicators have also turned positive. After hitting an extremely oversold, typical bear market, condition in mid 2011 the Major wave 1 uptrend hit overbought and now this uptrend threatens to break through that level to possibly an extremely, typical bull market, overbought. The MACD, which broke below neutral into bear market territory, is now rising above neutral into bull market territory. As long as these trends continue the bull market remains in force. In the mean time, the economy is still soft with consumers and investors still bearish. This is a perfect set up for the resumption of a bull market.

After the 58% stock market loss during Oct07 – Mar09, to end Supercycle wave 2. We expected Cycle wave [1], of Supercycle 3, to carry the market up in five Primary waves. Primary waves I and II ended in May11 and Oct11 respectively. Primary wave III should be underway now. Rising primary waves divide into five Major waves. Major waves 1 amd 2, of Primary III, ended in Oct11 and Nov11 respectively. Major wave 3 should be underway now. This Major wave may subdivide into five Intermediate waves. Similar to Major wave 1 between Mar09 and Apr10. Currently we are anticipating this event.

MEDIUM TERM: uptrend high SPX 1315

The daily chart below offers a good view on Primary wave II and the current progress of Primary wave III. Notice the May11-Oct11 decline was five waves, but appears to have taken the form of an elongated flat. The same pattern that ended the 1987 crash. The SPX lost 22% during that 1371-1075 decline. But has already retraced 81% of that loss during the early stages of Primary wave III. In fact, it is less than 4.5% from making a new bull market high. New bull market highs have already been hit by four of the nine SPX sectors: XLK, XLP, XLY and XLU. With the fifth, XLV, only a few ticks away. This does not occur during bear markets, nor bear market rallies.

From the early October SPX 1075 low the market rocketed to SPX 1293 in less than four weeks, ending Major 1. A corrective Major 2 correction followed to SPX 1159. Since then this market has been uptrending. During the uptrend we labeled Minor 1, of a potential Intermediate wave i uptrend, at SPX 1267. Then Minor wave 2 At SPX 1202. Minor wave 3 just hit SPX 1315 this week. After it concludes we should get a Minor 4, with support at SPX 1267. Then Minor wave 5 to conclude the uptrend. Currently the market is quite overbought on the daily RSI.

SHORT TERM

Support for the SPX is at the 1313 and 1303 pivots, with overhead resistance at the 1363 and 1372 pivots. Short term momentum has risen to just overbought after hitting neutral early friday. Minor wave 1 unfolded in a complete nine waves. We marked the basic five wave structure with Minute waves on the hourly chart. Minor wave 3 has thus far unfolded in an incomplete 15 waves. We again have marked the basic five wave structure with Minute waves i-ii-iii-iv on the hourly chart.

Minute wave v, the smallest of the waves, has thus far rallied in an incomplete three waves up from the Minute iv SPX 1278 low. It should have at least one more notable pullback, with support at SPX 1303, then another rally to a higher high to complete Minor wave 3. A potential scenario suggests the market opens higher on monday. Then sells off for the rest of the day. Rallies tuesday/wednesday, during the FOMC meeting, on QE 3 rumors. Then pulls back substantially, with SPX 1267 support for Minor wave 4, when no QE 3 is announced.

Currently there is absolutely no pivot resistance until the SPX enters the 1363 pivot range. Quite a gap between the 1313 and 1363 pivots. There is however some price resistance at the following levels: 1327, 1345/47 and then 1356, which is within the 1363 pivot range. Should this uptrend clear SPX 1327 we would have to consider the entire uptrend as a possible Major wave 3, rather than an Intermediate wave one of 3. Short term OEW charts have remained postive since under SPX 1230, with support now just under 1300. Short term support is at the 1313, 1303 and 1291 pivots. Overhead resistance is at SPX 1327, 1345/47 and then the 1363 pivot. Short term momentum is rising. Best to your trading!

FOREIGN MARKETS

The Asian markets were all higher on the week for a net gain of 3.1%. Only China and India have not confirmed uptrends.

The European markets were also all higher for a net gain of 3.1%. Italy is still in a downtrend.

The Commodity equity group were all higher for a net gain of 3.5%. Only Russia has not confirmed an uptrend.

The DJ World index is uptrending and gained 3.1% on the week.

COMMODITIES

Bonds lost 1.0% on the week as the choppy, trading range, uptrend from October appears to be weakening. Should a downtrend be confirmed Bonds could have a substantial drop as this last uptrend could complete a large Major ABC pattern from the April 2010 low.

Crude remains a volatile commodity, uptrending but losing 0.5% on the week.

Gold (+1.5%) appears to be uptrending from the December $1524 low. On friday it broke out of a week long trading range to the upside. Silver gained 7.7% on the week. Most of it on friday.

The USD (-1.6%) appears to be in a weakening uptrend. We have negative divergences at the recent highs. Similar to the Sept/Oct highs. And both rallies, during this lengthy six month uptrend are equal in length.

NEXT WEEK

Economic reports for the week kicks off on wednesday with Pending home sales, FHFA housing prices and the FED’s FOMC statement. On thursday, weekly Jobless claims, Durable goods orders, Leading indicators and New home sales. Then friday ends the week with the Q4 GDP estimate and Consumer sentiment. Best to your weekend and week!

NOTE

We have been been tracking five CEF’s (closed end funds), and two penny stocks at the back of the charts. Now that we have tracked them for a few months and are satisfied with the price activity, we will move them into the mix with the other stocks. We are not recommending these stocks. Just trying to offer some additional investment ideas for our readers. Good luck!

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 © 2012 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