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
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Inflection Point

Stock-Markets / Stock Markets 2013 Sep 14, 2013 - 05:16 PM GMT

By: Tony_Caldaro

Stock-Markets

The market staged a surprise this week, continuing its rally from the August 29th low at SPX 1628, by gapping up the first two days and hitting SPX 1690 by Thursday. We had expected the market to run into resistance at the SPX 1658-1667 range and even the OEW 1680 pivot range. But it managed to exceed both. For the week the SPX/DOW were +2.5%, the NDX/NAZ were +1.55%, and the DJ World index was +2.3%. Economic reports came in with a positive bias. On the uptick: wholesale/business inventories, retail sales, the PPI, the M1 multiplier, the WLEI, plus weekly jobless claims and the budget deficit improved. On the downtick: consumer credit/sentiment, and export/import prices. Next week we have industrial production, the FOMC meeting, housing reports and options expiration.


LONG TERM: bull market

From time to time, during bull and bear markets, the market takes an unexpected path. This past week was one of those times. Occasionally an unexpected turn suggests a complete review of the long term trend. That is not required at this time, as the path was up and we are still in a bull market. The recent confirmed downtrend did not resume, as expected, and the market ended the week closer to its highs then its recent lows. This sudden reversal has many questioning their wave counts, both medium and longer term. While we do recognize there are several possibilities. We choose to remain with the counts posted on the SPX and DOW charts.

This Cycle wave [1] bull market continues to unfold in five Primary waves. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III has also divided into five Major waves, but both Major wave 1 and 3 have subdivided. Major waves 1 and 2 ended by mid-2012. Major wave 3 recently ended in August, and possibly Major wave 4 as well. Should the DOW continue it rally to new highs, we would consider this uptrend Major wave 5. Should the DOW fail to make new highs and make lower lows, we would consider this a continuation of Major wave 4. In either case, the bull market is still not expected to end until late-winter to early-spring 2014.

MEDIUM TERM: inflection point

After the early August high at SPX 1710, we anticipated the market had ended a Major wave 3 uptrend and was down trending in Major wave 4. We expected the downtrend to take about one month to unfold, and generally decline in a three wave sequence SPX: 1630-1670-1540. The decline was a bit slow to get going. It dropped to SPX 1639, rallied to 1670, and then declined to 1627. We accepted this second low as the end of the first major decline. This week, however, the market rallied past SPX 1670 to 1690. This was quite a bit more than we expected. During this bull market, however, B waves have sometimes pushed beyond the limits of expectations. Only to turn down to complete the downtrend. With this in mind we maintain a Major wave 4 count on the SPX charts: Int. A 1627, Int. B underway, and Int. C to follow.

Remaining objective, we also offer an alternate count on the DOW charts. This count suggests Major wave 4 ended at the recent low, and a Major wave 5 uptrend is currently underway. This is the reason we suggest that the market is at a point of decision or an inflection point. As noted above. If the DOW makes lower lows Major 4 continues, higher highs Major wave 5 underway. Medium term support is at the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots.

SHORT TERM

The recent rally started off quite choppy, but has recently turned impulsive. Another reason for the indecision inflection point. If it had remained choppy throughout, we would be more convinced of the Int. wave B scenario. Under this scenario the rally can be counted as a Minor a-b with Minor c underway.

Under the Major wave 5 DOW scenario it can be counted as an Minor wave 1-2 with 3 underway.

Short term support is at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 pivot and SPX 1710. Short term momentum is displaying a potential negative divergence. The short term OEW charts remain positive with the reversal level SPX 1674.

FOREIGN MARKETS

The Asian markets rallied 3.5% on the week. Indonesia, Japan and N. Korea have yet to confirm uptrends.

The European markets gained 2.6% on the week. All indices in uptrends.

The Commodity equity group gained 1% on the week. All uptrend here too.

The DJ World index is still in an uptrend gaining 2.3% on the week.

COMMODITIES

Bonds remain in a downtrend, but ended the week flat.

Crude is still in an uptrend, but lost 1.6% on the week.

Gold appears to be correcting losing 4.6% on the week.

The USD is still in an uptrend, but lost 0.9% on the week.

NEXT WEEK

Monday: NY FED at 8:30, then Industrial production at 9:15. Tuesday: the CPI and the NAHB housing index. Wednesday: Housing starts, Building permits, and the FOMC statement. Thursday: weekly Jobless claims, Existing home sales, the Philly FED and Leading indicators. Friday: Options expiration. Best to your weekend and week!

CHARTS: http://stockcharts.com/public/1269446/tenpp

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 © 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 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