Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Is a Major Stock Market Top Forming?

Stock-Markets / Stock Markets 2015 Nov 17, 2015 - 03:09 PM GMT

By: Harry_Dent

Stock-Markets I warned in early October that stocks looked like they were setting up for another sharp crash into the height of the “crash season” in mid-October.

Instead, we got rate cuts in China, rumblings of stronger QE in Europe, and a continued rally at home.

In other words – central banks delayed the inevitable. Again.

So let’s look at where the markets are today…


In the revised paperback version of The Demographic Cliff back in the summer, I gave two scenarios for an impending peak in stocks. The chart gave leeway for a potential new high, which is why you see two large “5’s” at the top there:

In both scenarios, we would see a break of the narrow and bubbly channel that had been rising since late 2011.

We got that.

The question was… how high would they bounce after that initial breakthrough?

The first scenario was the S&P 500 would fall toward 1,800 and then have a two-wave rally back toward 2,000.

That still looked likely at the beginning of October... back when oil and China’s Shanghai Composite Index were trading in a narrow range. That suggested another short crash to follow.

Clearly that wasn’t the case. The S&P 500 breached 2,100 and came to within a percent of its peak.

So, scenario two took the cake… wherein the large cap markets would make slight news highs, or at least come close to retesting those highs. The Nasdaq 100 actually did make a very slight new high last week before pulling back.

If the markets outside of that index fail to make new highs – folks, that’s a bearish signal if I ever saw one.

But even if they do make slight new highs… that would very likely set up a number of major divergences as Adam has been pointing out.

Damned if we do, damned if we don’t.

Either way, it doesn’t look good.

And we’re already seeing such divergences. Over 50% of S&P 500 stocks are trading below their 200-day moving average. Investors have grown very selective, favoring only the largest stocks.

And for the Dow Industrials to make a new high without Dow Transports or Utilities – that’s another divergence! A major one, at that.

Then there’s the advance/decline line – showing how many stocks are rising versus those that are falling. And guess what? Another divergence there! This rally has been very selective to large-cap stocks. To point, the Russell 2000 which lists small-cap stocks is 8% off its high. And it’s increasingly doubtful it’ll make a new one even if the S&P finally does.

Here’s the bigger picture…

It looks like a major top is forming.

Rodney just wrote yesterday about the business cycle of mergers, acquisitions, and borrowing that appears to be peaking…

At our Irrational Economic Summit in Vancouver I presented on a series of what looked like major tops forming consecutively in the major world markets…

Junk or high yield bonds peaked in November of 2013. We warned about it right on the day of the top.

Dow Transports clearly peaked in November 2014, with Dow Utilities two months later in January. (Transports especially are very unlikely to make a new high in the coming months.)

Then in April we saw the DAX peak in Germany and the FTSE in England – down 24% and 19% at their worst, respectively, and new highs look very doubtful there as well.

Then the Shanghai peaked in June – which we also called the day of – and has been down as much as 45%.

“But Harry, that index is up over 20% from its recent low.”

It’s still down almost 30%!

And the only reason it’s popped up is because China’s government has poured hundreds of billions of their currency into propping it up!

Trust me ­– that bubble is still in burst mode and has almost zero chance of making a new high!

Finally the Nasdaq peaked in late July. Again, the Nasdaq 100 has been the only index to make a slight new high, but not enough to change the course of the future.

Adam has been warning of at least of a short-term pullback, and that is happening. So keep alert to Adam’s comments in the coming days and weeks.

It’s likely we see a slight new high in the S&P 500 – around 2,135 if not higher ­– by late this month, and possibly a slight new high in the Dow.

But even if that were the case… there would be divergences galore. And that would signal even more strongly a major long-term top – and a 2008-like crash, only stronger in 2016.

If only the largest cap U.S. markets are able to make slight new highs…

At this point, that would be very bearish.

The odds are that the Fed will raise rates a quarter point in December, and that could be bad for stocks and bonds.

I think something will go wrong in the world by then instead.

Stay more defensive in passive portfolios. If you’re in stocks, use a service like Rodney’s which mimics the way he’s been making money for 14 years. But while Wall Street analysts are cheering on a Santa Claus rally across the broad market… I wouldn’t get your hopes up.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2015 Harry Dent- 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.

Harry Dent Archive

© 2005-2019 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