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
Massive Stock Market Price Reversion May Be Days or Weeks Away - 22nd Sep 19
How Russia Seized Control of the Uranium Market - 22nd Sep 19
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Stock Market Downtrend May Have Bottomed

Stock-Markets / Stock Markets 2012 May 26, 2012 - 11:22 AM GMT

By: Tony_Caldaro

Stock-Markets

Best Financial Markets Analysis ArticleMarkets rebounded this week after last week’s nasty selloff. Last week’s decline of SPX/DOW 3.9% was the largest weekly decline in six months. The previous one was the week of November 21, 2011: a 4.75% decline that marked the end of Major wave 2. Thus far, it looks like the recent selloff may have marked the end of Major wave 4. For the week the SPX/DOW were +1.20%, and the NDX/NAZ were +2.05%. Asian markets were flat, European markets were +0.6%, and the DJ World index gained 0.7%. On the economic front it was a mixed week. All five the publicly watched indicators were higher: existing/new home sales, FHFA housing prices, durable goods orders and consumer sentiment. Yet, four of the not so publicly watched indicators we track were all lower: the M1- multiplier, new home sale prices, the monetary base and the WLEI. The last week of May starts off with a US holiday, then is followed by a slew of economic reports. Q1 GDP, the Payrolls report and PCE prices highlight the week. Best to your week!


LONG TERM: bull market

While we entertained some alternates counts for the medium term last week. None of them suggested this Mar 2009 bull market was over. Even though the market hit a level which was about 2% lower than expected. It did hit a medium term oversold level that has only occurred once in each of the past four years. Each time this has occurred, the market has rallied about 100 SPX points within two weeks. Currently the market has only risen 36 points, 1292-1328, with a week to go. If this pattern prevails this week could be quite interesting.

Since the world’s markets are linked these days, and our OEW analysis covers twenty world indices. We thought it would be best to give a quick overview, by region, and alert everyone to the negative long term prospects in the majority of these indices. In Asia we track eight countries. Six remain in long term downtrends, and our smart money indicator has seven of these markets with negative outflows. The only real positive is Indonesia. In Europe we track seven indices. Six remain in long term downtrends as well, and five have negative outflows. The only real positive is England. Of the five that are left: the DJ World index, Brazil, Canada, Russia and the US. Four remain in long term uptrends, but three (the commodity indices) have negative outflows. The real positives here are the US, and oddly enough the DJ World index. With only 35% of the world’s market in long term uptrends, it will be a difficult task for these bull markets to make much more upside progress. Unless, of course, world markets change dramatically. Our bull market target remains SPX 1545-1586.

MEDIUM TERM: downtrend may have bottomed

Last weekend we noted the six corrections during this bull market have ranged from 7.4% to 22.0%, with 9.1% being hit twice. A week ago friday the SPX hit 1292, a decline from 1422 and exactly 9.1%. The decline in the SPX appears to have taken the form of a double three: a failed flat ending at 1359, a B wave to 1415, then a zigzag to 1292. Note the zigzag (1415-1292) equalled twice the length of the flat (1422-1359). During Major wave 2, a zigzag, wave C (1278-1159) equalled 1.5 times wave A (1293-1215). So we have alternation between the waves. Also note Major wave 2 declined 134 points (1293-1159), while Major wave 4 has declined 130 points (1422-1292). Symmetry. And, SPX 1292 represents a 50% retracement of the entire Major wave 3 uptrend from SPX 1159-1422. The market harmonics appear to point to SPX 1292 as a significant low.

The DOW, however, has taken on a different pattern. A five wave downtrend from 13,300 to 12,700, a three wave uptrend to 13,300, then another five wave downtrend to 12,300. This looks more like an irregular zigzag, with wave C equalling 1.618 times wave A. This wave activity also allows for a potential alternate count which was posted in last week’s weekend update. For now, we remain with the primary counts posted on the SPX and DOW.

SHORT TERM

Support for the SPX remains at the 1313 and 1303 pivots. Resistance is at the 1363 and 1372 pivots. Short term momentum ended the week right around neutral. The short term OEW charts signalled a potential positive swing on friday when the SPX traded above 1321. This is the first potential reversal since the C wave SPX 1415 decline began. As a result we labeled the recent low with a tentative green Major wave 4.

While the correction was unfolding between April and May. The DOW made a new intraday high for one day on May 1st, while the other three major indices did not. This signalled the end of its uptrend, and all four major indices then declined in unison. Last wednesday the DOW made a new, one day, intraday low for its downtrend while the other three major indices did not. This in reverse may have signalled the end of the downtrend and correction. Note after the high in May the markets moved very little for the first two days and then accelerated to the downside. After wednesday’s low the markets again moved very little for the next two days into friday’s close.

Short term support is at the OEW 1313 and 1303 pivots, with resistance at SPX 1324/28 and 1342/47. If our short and medium term count is underway the SPX should hold the OEW 1313 pivot range (1306-1320) during any further pullbacks. The SPX closed at 1318 on friday. Best to your trading and extended weekend!

FOREIGN MARKETS

The Asian markets were quite mixed on the week and ended flat. Only China is in an uptrend.

The European markets were mostly higher gaining 0.6% on the week. All indices in downtrends.

The Commodity equity group was also mixed on the week for a net gain of 0.5%. All downtrends here as well.

The downtrending DJ World index gained 0.7% on the week.

COMMODITIES

Bonds continue to uptrend but were flat on the week. The 10 yr yield is 1.75%.

Crude made a new low for its downtrend at $89.28 and has now corrected 19% from its early March $110.55 high. It declined 0.8% for the week. We are now observing a positive divergence on the daily chart, with the most extreme oversold condition since 2008 on the weekly chart.

Gold has remained in a downtrend for three months and lost 1.1% on the week. The most obvious count, since the $1924 high, is a contracting Major wave 4 triangle. This would also fit into the Silver long term count. A rally above $1675 should turn both metals positive again.

The USD continues to uptrend gaining 1.4% on the week. It is starting to display a negative divergence at extremely overbought levels. Should it start to weaken here its uptrend is likely over.

NEXT WEEK

Monday is a holiday. Tuesday we have Case-Shiller at 9:00, and Consumer confidence at 10:00. On wednesday Pending home sales. Thursday, Q1 GDP (estimate 1.9%), weekly Jobless claims, ADP and the Chicago PMI. On friday the monthly Payrolls report, Personal income/spending, PCE prices, ISM manufacturing, Construction spending, and monthly Auto sales. The FED has nothing scheduled for the week. 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 © 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

6 Critical Money Making Rules