Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Dow Stocks Index Makes it Seven

Stock-Markets / Stock Markets 2015 Aug 12, 2015 - 10:07 AM 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 DJIA index has recorded seven consecutive down days in a row! That-s after a two-day rally which was preceded by six consecutive down days in a row. That-s undeniable bearish behavior. On the chart below you can clearly see that, after its last break of the green uptrend line from the October low, the index began to move into the lower half of its intermediate (blue) channel and establish a downtrend which has already taken it to the edge of the lower channel line. Also, besides making five daily closes below its 200-dma, it has (finally) decisively dropped below the red horizontal line which corresponds to the 2040 support line on SPX.

Last week-s headline was "CRITICAL WEEK AHEAD". I think the bears won that battle!

After the NASDAQ, the SPX is the last of the major indices which has not yet established a bearish pattern. I suspect that it won-t be for much longer!

Indicators Survey

Last week, the weekly MACD drew closer still to its zero line. At its current rate of decline, another couple of weeks should put it at or below it.

The daily indicators all turned down at the end of the week.

If examined under magnifying lenses, the summation index (courtesy of extended its miniscule rally at the beginning of last week and started to decline by the end.

On the 1X1 P&F chart, SPX has established another level of distribution which has potential counts to the low 2000s and possibly beyond.

A congestion level has formed on the 3X3 chart between 2040 and 2083 which represents important support. By dropping down to 2068 last week, SPX has only begun to penetrate it.

Chart Analysis

The Daily SPX (chart courtesy of as others below) shows that the index has arrived at an area of strong support which includes trend lines, a former congestion area, and its 200-dma. This is the fourth time that the index has tested this level over the past six weeks. Past tests benefited from a background of bullish news and events which coincided with holding support. Instead, this time, Friday-s job report suggested that the Fed would raise rates next month. While SPX held just above its previous low of 2064 on Friday, negatives other than the psychological specter of a September rate increase may become manifest to help it make that final push through the support level.

The cycles should continue to press down on prices for another month or two; so, if anything, the pressure should increase as we get closer and closer to their lows deemed to be around October. Friday-s hold could continue for another day or two, and then another attempt at moving lower should start. The indicators have all turned down over the past week and none of the oscillators has reached an oversold condition in preparation to turning up. This should soon lead to another test of the 2040 level which is expected to hold once again, but only for a short period of time.

The Hourly chart shows the index holding above its former low after breaking a trend line drawn across the last two lows. By Friday, it had back-tested the broken trend line but, with the A/Ds showing some positive divergence and the other two oscillators beginning to turn up, it could easily continue its move above the trend line to relieve the oversold condition. However, with the weekly and daily indicators in a downtrend, the bounce higher should be limited.

A resumption of the decline and a drop below 2064 should quickly lead to another test of the 2040 level which is expected to hold temporarily before finally giving way to the lower counts.


The most significant feature of the following three charts of market leaders is that XBD is finally beginning to succumb to the developing weakness. Many analysts believe that this is one of the key market indicators. Although it had remained stronger than the other two shown here, it is evident that it is beginning to roll over after making a double top.

All three of these indices have made P&F distribution tops which can send them several points lower over the near term.

UUP (dollar ETF)

UUP took advantage of the Friday jobs report to create a very bearish pattern. This is known as a bearish engulfing candle which is one of the five most reliable candlestick patterns. Should it live up to its reputation, the dollar should now start declining. Whether this is only a near-term decline as part of its consolidation pattern or something more, is not knowable at this time but will become apparent as we move forward. What is known is that a declining dollar tends to be bullish for the next two indices: gold and oil!

GLD (Gold trust)

You will notice that, about 2 weeks ago, GLD made a pattern which is bullish: a bullish engulfing candle, the exact opposite of the pattern made by the dollar on Friday. As a result, GLD had a slight up move followed by a sideways pattern, but it did not make a new low. The indicators turned up at that time, but they did not provide much lift for prices; only support.

Some observations: GLD appears to have found support at the bottom of a (red) intermediate channel; GLD did manage to move out of a small (red) down-channel; at the end of the week the indicators were still trending up with no sign of reversing; GLD has moved above its pink MA, but it must overcome the blue MA as well; it also has to move out of a larger down-trending red channel. After that there will be several longer channels and trend lines to overcome! In other words, unless GLD has a really dynamic up move which slices through some of these trend lines right away, it may only have a move in line with its current count to about 109, at best.

For the moment, GLD is only likely to produce a bounce in a downtrend which should be followed by another decline to the 100 level.

USO (US Oil Fund)

As expected, USO reached its minimum phase projection of 15. If the USD starts to weaken, it may prevent it from reaching its full projection target of 13 - at least right away.


More and more indices are beginning to reflect the underlying market weakness. SPX is tilting on the edge and could join their ranks in the next couple of weeks. The best time frame for the market to enter a full-blown correction is between now and October. This is when the downward cyclic pressure should be the most intense.


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