Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Stock Market Bull Trap? January 22 Top Likely - 19th Jan 19
After the Crash, the Stock Market Made a V-shaped Recovery. What’s Next - 19th Jan 19
David Morgan: Expect Stagflation and Silver Outperformance in 2019 - 19th Jan 19
Why Brampton Manor Academy State School 41 Oxbridge Offers is Nothing to Celebrate! - 19th Jan 19
REMAIN Parliament Prepares to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 19th Jan 19
Gold Surges on Stock Selloff - 18th Jan 19
Crude Oil Price Will Find Strong Resistance Between $52~55 - 18th Jan 19
Stock Market’s Medium Term is No Longer Bullish. It is Now Mixed - 18th Jan 19
SPX and Gold; Pivotal Points at Hand - 18th Jan 19
Fable Media Launches New GoWin Online Casino Affiliate Site in UK - 18th Jan 19
The End of Apple! - 18th Jan 19
Debt, Division, Dysfunction, and the March to National Bankruptcy - 18th Jan 19
Creating the Best Office Space - 18th Jan 19
S&P 500 at Resistance Level, Downward Correction Ahead? - 17th Jan 19
Mauldin: My 2019 Economic Outlook - 17th Jan 19
Macro Could Weaken After US Government Shutdown. What This Means for Stocks - 17th Jan 19
US Stock Market Indexes Reaches Fibonacci Target Zone – Where to Next? - 17th Jan 19
How 2018 Was For The UK Casino Industry - 17th Jan 19
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19
How Unrealistic Return Assumptions Are Ruining Your Stocks Portfolio - 10th Jan 19
What’s Next for the US Dollar, Gold, Stocks & Bonds? - 10th Jan 19
America's New Africa Strategy - 10th Jan 19
Gold Mine Production by Country - 10th Jan 19
Gold, Stocks and the Flattening Yield Curve - 10th Jan 19
Silver Price Trend Forecast Target for 2019 - 10th Jan 19

Market Oracle FREE Newsletter

Bitcoin Analysis and Trend Forecast 2019

Stocks Bull Market Continues

Stock-Markets / Stock Markets 2013 Nov 03, 2013 - 12:20 PM GMT

By: Tony_Caldaro

Stock-Markets

The market started the week by making new all time highs everyday until the FED concluded its FOMC meeting. Then after hitting SPX 1775 earlier that morning the market pulled back for the rest of the week. For the week the SPX/DOW were +0.15%, the NDX/NAZ were -0.30%, and the DJ World index was -0.60%. On the economic front positive reports outpaced negative ones 9 to 6. On the uptick: industrial production, capacity utilization, Case-Shiller, business inventories, the CPI, the Chicago PMI, ISM manufacturing, the monetary base and weekly jobless claims improved. On the downtick: pending home sales, retail sales, the PPI, consumer confidence, the ADP and the WLEI. Next week we try again for Q3 GDP (est. +1.9% to 2.4%), monthly Payrolls and PCE prices.


LONG TERM: bull market

After four years of FED Bond buying programs nearly everyone has caught on to what is driving this bullish asset cycle: Quantitative Easing. We have written about this several times before. Recently we checked to see how QE 3 is performing relative to the market performance of QE 1 and QE 2. What we found is significant under performance. QE 1 ran from Mar09 to Jun10, was $1.4tln in total, and the market rose 1% per month per $20bln. QE 2 ran from Aug10 to Jun11, was $600bln in total, and the market again rose 1% per month per $20bln. QE 3 is still underway from Dec12, is $85 bln per month, and the market is rising at 1% per month per $40bln.

In the chart above we display the projected trends of QE 1 and QE 2, and notice how the market stayed above that trend until a few months before the program ended. With QE 3 we have drawn three projected trends: blue at the normal 1% per $20bln/mth; red at 1% per $30bln/mth; and green at 1% per $40bln/mth. Notice the market is stuggling to remain above the lowest trendline, while rising at half the rate of the previous QE programs. Quantitative Easing is clearly losing its effectiveness at the market’s current lofty levels.

In the meantime the bull market continues to unfold. We have been projecting a Cycle wave [1] bull market lasting until late-winter to early-spring 2014, with an upper price target of the 1779 OEW pivot. It is now early November and the SPX has already reached the 1779 ( 7 point) pivot range, with months to spare. With QE 3 still underway the market is likely to continue higher.

Cycle wave [1] is unfolding in five Primary waves. Primary waves I and II completed in 2011, and Primary III has been underway since then. Primary I divided into five Major waves with a subdividing first wave. Primary III has also divided into five Major waves, but both the first and third waves subdivided. Currently we are in Major 5 of Primary III. When it concludes we should get the largest correction of the year for Primary IV. Then we are expecting a simple, one trend, Primary V to end the bull market.

MEDIUM TERM: uptrend

All the major US indices we track are in confirmed uptrends. We have been counting the SPX uptrend from late August at 1627. The DOW, unfortunately in this trifurcation market, has only been uptrending since early October. Nevertheless, the SPX count we have been posting displays an Int. wave i/a at 1730, an Int. wave ii/b at 1646, and an Int. iii/c reaching 1775 this week. The reason for the number/letter wave label, is that we are not quite sure if a normal five wave advance will occur during this Major wave 5 uptrend. Or an ending diagonal triangle. When Int. wave iv/d concludes we will have our answer.

The current Int. wave iii/c advance may have concluded at SPX 1775. We can count five Minor waves up from the SPX 1646 low. And, the market has become quite choppy for the first time since this advance began. We would expect a drop to at least the mid-1740′s to help confirm Int. wave iv/d has been underway. Technically, besides the recent choppy action, the market has recently had its largest pullback since the advance began. This often indicates a larger pullback is underway. Medium term support is at the 1699 and 1680 pivots, with resistance at the 1779 pivot.

SHORT TERM

The Int. wave iii/c advance from SPX 1646 has unfolded in five Minor waves: 1712-1696-1759-1741-1775. The fifth wave, only 34 points, was the shortest. After that high the market has declined in an abc to SPX 1756, rallied to 1769, then declined in another abc to 1753 on friday. At the second low there was a clear short term positive divergence, and the market rallied into the close. This decline could be labeled Minor a of Int. wave iv/d, friday’s rally Minor b, with Minor c to follow next week. This appears to be the most probable count. There appears to be good resistance between SPX 1766 and 1769, with good support around SPX 1740. If the market drops into the SPX low 1740′s and then begins to impulse again the i-ii-iii-iv-v count is in play. If it drops below SPX 1730 then the a-b-c-d-e count is in play.

Short term support is at SPX 1753 and SPX 1730, with resistance at the 1779 pivot range and SPX 1804. Short term momentum is rising off a positive divergence. The short term OEW charts have flip-flopped for two days now, ended positive, with the reversal level at SPX 1760. Best to your trading next week.

FOREIGN MARKETS

The Asian markets were mostly higher on the week gaining 0.5%. China, Hong Kong, Indonesia, Japan and Singapore are all in confirmed downtrends.

The European markets were mostly higher but only gained 0.2%.

The Commodity equity group were all lower losing 0.7%.

The DJ World index remains in an uptrend but lost 0.6%.

COMMODITIES

Bonds continue to uptrend but lost 0.5% on the week.

Crude continues to downtrend losing 3.4% on the week.

Gold is trying to uptrend but lost 2.8% on the week.

The USD is uptrending again gaining 1.9% on the week.

NEXT WEEK

Monday: Factory orders at 10AM. Tuesday: ISM services at 10AM. Wednesday: Leading indicators at 10AM. Thursday: Q3 GDP, weekly Jobless claims and Consumer credit. Friday: the monthly Payrolls report, Personal income/spending, PCE prices and Consumer sentiment. Three speeches on tap for the FED next week: Monday: FED governor Powell at 11:30; Thursday: FED governor Stein at 2PM; and Friday: FED chairman Bernanke at 3:30PM. 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

© 2005-2018 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