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
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Downtrend May Have Bottomed

Stock-Markets / Stock Markets 2013 Jun 22, 2013 - 04:11 PM GMT

By: Tony_Caldaro


An interesting week. The market started the week by gapping up and rallying to SPX 1654 just before the close on Tuesday. Wednesday, FOMC day, the market hovered just below that level awaiting the FOMC statement and press conference. When traders heard about a potential cut back in QE 3 by year end, and concluding it by mid-2014, the May-June correction resumed. For the week the SPX/DOW were -1.95%, the NDX/NAZ were -2.05%, and the DJ World index lost 3.2%. Economic reports for the week remained positive. On the uptick: the NY/Philly FED, the NAHB, the CPI, housing starts, existing home sales and leading indicators. On the downtick: building permits, the M1 multiplier, the WLEI plus weekly jobless claims rose. Next week we get Q1 GDP, personal income/spending and PCE prices.

LONG TERM: bull market

The Cycle wave [1] bull market from March 2009 continues. During this five Primary wave bull market we have seen Primary waves I and II conclude in 2011, with Primary III underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but both Major waves 1 and 3 are subdividing. Major waves 1 and 2 of Primary III completed by mid-2012, Major wave 3 has been underway since then. Intermediate waves i and ii of Major 3 completed by late-2012.

Intermediate wave iii probably completed in May13 and Intermediate wave iv has been underway since then. When Int. iv concludes an uptrending Int. v should take the market to all time new highs to complete Major wave 3. Then after a Major 4 correction, a Major 5 uptrend to new highs should complete Primary III. Finally, after a Primary IV correction an uptrending Primary V should complete the bull market. So we still have three more uptrends, separated by downtrends, before the bull market concludes. We are still expecting a final top in late-winter to early-spring 2014.

MEDIUM TERM: downtrend probable

Despite the correctional activity for the past four weeks we still have not received a downtrend confirmation from OEW analysis. This is a bit unusual since 95% of the International markets we track are in confirmed downtrends, with the US the only exception. We do expect it to occur this week. Nevertheless we have been tracking the market like it has been in a correction since the SPX 1687 high on May 22nd. This week the market made a new low for Intermediate wave iv at SPX 1578. Thus far, the market has corrected 6.5%.

We have been counting the correction as a complex three. From the orthodox high of Int. iii at SPX 1674 we observed a double zigzag into the early June 1598 low, and labeled that Minor wave a. Early this week Minor b completed, with its own zigzag, at SPX 1654. After that the market went into free fall hitting a low of SPX 1578 on Friday it what appears to be a double zigzag of its own. At that low Minor c (1654-1578) equaled Minor a (1674-1598). Setting up for a potential Int. iv low.

The market did react off that low with three waves SPX: 1595-1585-1598 thus far. This advance represents the best rally since Minor c began. The previous rallies were between 9 and 15 points. At the low we had a positive divergence on the hourly RSI, from the most oversold level since Intermediate wave ii, and the most oversold MACD since November 2011. The market is also displaying a positive RSI divergence on the daily chart, and a sufficiently oversold RSI on the weekly chart. As a result of all these technical parameters we posted a tentative Int. wave iv low label at SPX 1578. Since the counter rallies during Minor a only lasted a day or two. We should know if the bottom is in by early next week. Medium term support is at the 1576 and 1552 pivots, with resistance at the 1614 and 1628 pivots.


Short term support is at the 1576 and 1552 pivots, with resistance at SPX 1593-1599 and the 1614 pivot. Short term momentum neared neutral after Friday’s positive divergence. The short term OEW charts remains negative with the reversal level now at SPX 1621.

We have been expecting an Int. wave iv correction to last into June ending between the OEW 1523 and 1552 pivots. There are a series of 4th waves from the Int. iii uptrend between SPX 1536-1540. We identified Minor wave a as a double zigzag (1674-1598), and have been expecting a double zigzag for Minor wave c as well. The recent decline from SPX 1654-1578 may have met that parameter, as it was seven waves: 1642-1651-1599-1609-1584-1599-1578. Friday’s rally off that low was encouraging: 1595-1585-1598.

While a correction low does look possible. We would still like to see the market rally above the OEW 1614 pivot. If this rally can not clear this level then it is probably a Minute wave b of Minor c, with a declining Minute wave c to follow. That would suggest another decline into the 1523 to 1552 pivot zone, specifically around SPX 1536-1540. This count is posted on the DOW hourly chart as an alternate. We shall see soon enough. Best to your trading!


The Asian markets were mostly lower on the week for a net loss of 2.2%. All eight indices are in confirmed downtrends.

The European markets were all lower on the week for a net loss of 4.8%. All eight indices are also in confirmed downtrends.

The Commodity equity group were all lower for a net loss of 3.2%. All three indices are in confirmed downtrends. Ninety-five percent of the International indices we track are in confirmed downtrends.

The DJ World index is downtrending and lost 3.2%.


Bonds had one of their worse weeks in many years losing 2.7%. Bonds are not only downtrending, but are officially in a bear market.

Crude continues to be choppy and volatile, still uptrending but lost 3.9% on the week.

Gold’s choppy uptrend turned into another downtrend as it lost 6.6% on the week. The spring swoon has apparently stretched into the first day of summer.

The USD has been downtrending, but may have reversed. It gained 2.4% on the week.


Tuesday kicks off the economic week with: Durable goods, Case-Shiller, FHFA housing index, Consumer confidence and New home sales. Wednesday: Q1 GDP (est. +2.4%). Thursday: weekly Jobless claims, Personal income/spending, PCE prices and Pending home sales. Friday: the Chicago PMI and Consumer sentiment. The FED has three public activities scheduled. Tuesday: Director Vermilyea testifies before the senate. Thursday: FED governor Powell gives a speech in Wash, DC. Friday: FED governor Stein gives a speech at the CFR … interesting. Best to your weekend and week!


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 © 2013 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.

Tony Caldaro Archive

© 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