Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Damn the Deficits, Huge Trump Tax Cuts Ahead! - 29th Apr 17
Gold Hostage to Stocks - 29th Apr 17
Warren Buffett Hates Gold… But Here’s Five Reasons You Need To Own It - 29th Apr 17
Stock Market Sentiment, Re-Fueled Along the Way - 28th Apr 17
Calling out the Central Bankers - 28th Apr 17
Fed's Third Inetrest Rate Hike and Gold - 28th Apr 17
USD/CAD - Invalidation of Breakout or Further Rally? - 28th Apr 17
What Happened to the Stock Market Crash Experts Were Predicting - 28th Apr 17
Earth Overshoot Day - Human Population Growth - 28th Apr 17
Misunderstanding GDXJ: Why It’s Actually Great News For Junior Miners - 28th Apr 17
What Makes Bitcoin Casinos So Remarkable? - 28th Apr 17
Financial Markets Improvised Explosives - 27th Apr 17
More Stock Market Short-Term Uncertainty As Stocks Get Close To Record High - 27th Apr 17
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

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.


© 2005-2016 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

Catching a Falling Financial Knife