Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Impending Stock Market Top - Trend Forecast Summer 2015

Stock-Markets / Stock Markets 2015 Apr 26, 2015 - 04:55 PM GMT

By: Toby_Connor

Stock-Markets

As I have been expecting for almost a year now the Nasdaq has finally reached its all-time highs at 5100.


That being said, the 5100 level is a huge resistance zone. It has held for 15 years. The bull is very mature at 6 years old, and without the benefit of further QE to continue driving it I really doubt we are going to get a sustained move above 5132. So I expect the stock market is going to top this year. I’m not expecting a sustained move above 5132 until stocks suffer a major multi-year cycle low. Something along the same lines as 2002 & 2009. At the very least we should experience a 38% Fibonacci retracement of this bull run before breaking through that resistance and producing the next bubble.

Don’t get me wrong I think there is still good money to be made in stocks this year, but traders will need to be patient and wait for daily and intermediate cycle corrections before buying, and they will need to sell once the market retests the 5100 high.

The current daily cycle is getting mature at 31 days; that along with the 5132 resistance zone should force a smaller daily cycle top next week, and a move down into a cycle low by the May employment report. Either AAPL’s earnings release on Monday or the FOMC statement on Wednesday could force a top.

Traders should be in cash this week and just waiting patiently for the correction down into the cycle low (selling short is out of the question as the Fed could abort or stretch the cycle low). Assuming the market is allowed to correct naturally over the next 2 weeks there will be a buying opportunity at that cycle bottom for another run back to, or marginally above 5100.

At that point a second failure to breach resistance should trigger a larger intermediate degree correction as the market starts to anticipate poor second quarter earnings. One that should retrace 50-100% of the last intermediate rally out of the October bottom.

This should prove to be the second (and probably last) great buying opportunity of the year as I expect the Fed will start talking extremely dovish, and probably even initiate an intervention to prop the market up. Either way traders should buy this bottom for a third run up to resistance at 5132. This time we will almost certainly see at least a marginal breakout above 5132 as the big money players manufacture new highs to suck in retail buyers and allow them to unload their long positions at the very top of the bull and get short.

Once the third test at 5132 fails then it will be time to abandon the stock market as the easy money will be over and the market should begin moving down into the multi-year cycle low with a probable bottom next spring. This is where we should expect at least a 38% retracement of the cyclical bull, and at some point the beginning of QE4 as the Fed panics when they are unable to stop the sell off with just talk or minor interventions. 

Once QE4 begins the next leg, the bubble leg, should begin and biotech should produce a true parabolic bubble into 2017 or 2018.

For the rest of the year traders need to be choosy and play the stock market only at cycle lows when sentiment is extreme.

Toby Connor

Gold Scents  

    GoldScents is a financial blog focused on the analysis of the stock market and the secular gold bull market.   Subscriptions to the premium service includes a daily and weekend market update emailed to subscribers.  If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions,email Toby.

    © 2015 Copyright Toby Connor - 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.


© 2005-2022 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