Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter


Stock Market Rally in a Downtrend?

Stock-Markets / Stock Markets 2015 Jul 06, 2015 - 12:34 PM GMT

By: Andre_Gratian


Current Position of the Market

SPX: Long-term trend - Bull Market

Intermediate trend - SPX may have started an intermediate correction

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.

Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know at


Market Overview

The Greek situation may continue to influence the market for the foreseeable future as traders wait for Sunday's referendum results. Voters are so divided on the issue that even a "yes" vote may not put an end to the uncertainty about Greek's future path.

From a technical standpoint, SPX held at a strong support level and has not yet confirmed that it has started an intermediate correction. But with cycles continuing to exert downward pressure on prices, even if Greece stops being a cause for concern, something else may pop up to take its place, perhaps China, or...?

In spite of the bounce, the trend remains down and we should wait to see if Monday's trading has a material effect on the market's positon.

Indicators survey

Weekly momentum indicators continue their downtrend with no sign of deceleration.

Daily momentum indicators had a slight bounce but not anywhere close enough to initiate a buy signal. The daily A/D indicator is showing some improvement and could even be said to display some positive divergence.

The NYSE Summation Index (courtesy of continues on its downward course but, here also, traces of positive divergence are appearing in its indicators. The RSI is oversold and could turn at any time.

The 1X P&F came within 2 points of filling its downside projection. The rally has produced a pattern which could be additional distribution but needs clarification.

The 3X chart filled an initial projection and, by closing below 2070, may be projecting a bigger decline ahead. This would be more certain if it could close below 2040.

Chart Analysis

Last week's call for additional weakness in the Daily SPX (chart courtesy of, including others below) was more than satisfied by a drop of 45 points which filled a P&F projection and was also arrested at the junction of several support lines which includes the 200-DMA. On the chart, it has been marked as "support". I have also marked the resistance level which could stop the rally if it tries to extend beyond Friday's high of 2085.

In last week's letter, I had stated that a drop below 2070 would create a lower low and place the index in a short-term downtrend. For the bulls to regain control of the long-term trend, they will have to take the index past 2130, at a minimum. Until then, the index remains in a technical downtrend. So far, the counter-trend has retraced exactly .382 of its decline from 2130 but, since it has not yet given an hourly sell signal, it is possible that it could move higher. If the decline should resume but holds at the P&F count of 2052/2055 which was not fully filled in the decline, we could expect a better rally to take hold and challenge the resistance level.

A clean break below 2052 would most likely challenge the 2040 level next.

The A/D had a good bounce from an oversold level but must now extend into positive territory to suggest that a reversal has taken place. Even so, this would still have to be confirmed by a bullish cross in the MACD.

On the Hourly chart I have drawn a blue trend line across the lows and a parallel across the 2130 high in order to define the current downtrend channel which is almost flat. After what is presumed to be a rally in a downtrend is complete, this downtrend will have to accelerate if we are to convert the short-term into intermediate. Since we do not have a confirmation that the rally has ended, we'll have to wait for one. In any case, the short-term will most likely be influenced by the results of the Greek referendum.

As of Friday's close, none of the indicators have given a sell signal.

DOW Composite Index

The index has penetrated its lower support line suggesting that the ascending triangle pattern is now complete. The minimum projection for a decline out of this type of formation is the entire width of the formation. This would give it a projection down to 5766 and should take several weeks to complete. The fact that this index has started to decline would also suggest that the other indices that make up the stock market will follow. Let's see if this holds true.


The leaders appear to have become followers! They remain stronger than the DOW Composite and even the SPX. Nevertheless, they too responded to last week's decline with IWM having the largest drop after being the strongest and making a new high. It also had the worst weekly close of the three.

All three indices found support on important trend lines which could hold them a little longer, but also bring about more weakness if broken. The XBD is now the strongest of the three. Their indicators are not in the best position to start a rally.

UUP (dollar ETF)

The dollar is trying to resume its uptrend. It has again penetrated its outer channel line and both indicators have turned up, but need to establish more momentum.

GLD (Gold trust)

GLD continued to decline last week. It is approaching the level of the two former lows. With important cycles still a week or two away from their bottoming time frame and, as you can see on the chart, the tendency of GLD to reach its low point in a selling climax, the index could quickly decline to the low 100s before making a quick recovery as it begins what could be an important uptrend of intermediate nature.

USO (US Oil Fund)

USO also looks as if it is ready to resume its decline. Its consolidation has taken a small rounding top appearance which is beginning to turn down. It's now a question of whether it will merely re-test its low or go lower. The P&F chart does have a price projection to 13, but these are not always met exactly.


While the short-term will be affected by tomorrow's Greek referendum, unless SPX and other indices show some real strength if they continue to rally, more downward pressure appears to be in the cards and could last until October.


If precision in market timing for all time framesis something that you find important, you should

Consider taking a trial subscription to my service.  It is free, and you will have four weeks to evaluate its worth.  It embodies many years of research with the eventual goal of understanding as perfectly as possible how the market functions.  I believe that I have achieved this goal. 


For a FREE 4-week trial, Send an email to:


For further subscription options, payment plans, and for important general information, I encourage

you to visit my website at It contains summaries of my background, my

investment and trading strategies, and my unique method of intra-day communication with

subscribers. I have also started an archive of former newsletters so that you can not only evaluate past performance, but also be aware of the increasing accuracy of forecasts.


Disclaimer - The above comments about the financial markets are based purely on what I consider to be sound technical analysis principles uncompromised by fundamental considerations. They represent my own opinion and are not meant to be construed as trading or investment advice, but are offered as an analytical point of view which might be of interest to those who follow stock market cycles and technical analysis.

Andre Gratian 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