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
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

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

Stocks Bear Market Underway

Stock-Markets / Stocks Bear Market Jan 16, 2016 - 04:33 PM GMT

By: Tony_Caldaro

Stock-Markets

First things first. An equity bear market has been confirmed on Friday by OEW. The market started the week at SPX 1922. After three gap up openings the market gyrated its way up to SPX 1950 by Wednesday, then started to head lower. Thursday also had a gap up opening, and the market recovered to SPX 1934. Friday, however, we had a big gap down opening and the market traded down to SPX 1858 before recovering to end the week at 1880. For the week the SPX/DOW lost 2.20%, the NDX/NAZ lost 3.15%, and the DJ World index lost 3.0%. Economic reports for the week were nearly all negative. On the uptick only Consumer sentiment. On the downtick: export/import prices, retail sales, the PPI, the NY FED, industrial production, capacity utilization, business inventories, the WLEI, the GDPn, plus the treasury deficit and weekly jobless claims rose. Next week we get reports on the Philly FED, the CPI, and Housing.


LONG TERM: bear market

After 6+ years of a rising stock market, which more than tripled, the bull market ended with a very rare, (in fact I don’t recall ever seeing one of this degree), failed fifth wave pattern in December, 2015.

After the market sold off sharply in August to complete Primary wave IV, we suggested two possible scenarios for the months ahead. First, if the market made new highs during the first uptrend the bull market would be over when that uptrend ended. Second, if the market failed to make new highs during the first uptrend Primary wave V will probably extend. This market did neither of those two options. It failed to make new highs during the first uptrend and topped. Don’t recall ever seeing this either. It has been that kind of bull market. One hundred and thirty years of stock market data and it is still doing new things.

We have been labeling this bull market as a five primary wave Cycle wave [1]. Primary waves I and II ended in 2011; and Primary waves III, IV and V ended in 2015. A Cycle wave [2] bear market is now underway. Historically, Cycle wave bear markets have lost 45% to 50% of market value. This would suggest a bear market low around SPX 1100 over the next year or so. The market closed on Friday at SPX 1880.

MEDIUM TERM: downtrend

In anticipation of a potential bear market confirmation we examined all four major indices to determine the actual bull market high. The four indices staggered their actual print highs throughout the year. The SPX/DOW topped in May, the NAZ topped in July, and the NDX topped in December. The only alignment of the four came in August when they all hit the labeled Primary IV low. With that in mind we took a close look at uptrend in the SPX, since we follow that one closely, after that low.

What we observed was a clear five wave rally 1867-1993; an irregular correction 1903-2021-1872 ending with a clear five waves down; a very strong impulsive 240 point rally to 2116; a pullback to 2019; then a five wave rally to 2104 ending in a diagonal triangle. We at first labeled this as Major waves up expecting Primary V to make new highs. Then we downgraded it to a Major 1 uptrend when it failed to make new highs. This was wrong, and we were right the first time around, it was all of Primary V.

The fact that the last rally, SPX 2019-2104, ended in a diagonal triangle. The rally was a failed fifth wave for the uptrend. And, the entire uptrend was a failed fifth wave for the bull market makes it compelling evidence that it was a failed Primary wave V. Regardless of how others may want to label it a bear market is underway.

Under the failed fifth primary wave scenario, the market is currently in its first downtrend of a new bear market. Bear markets always unfold in corrective patterns. Some are quite complex, like 2000-2002, others are rather simple, like 2007-2009. There is no way of telling ahead of time whether this one will be simple or complex, until a few trends have unfolded. Yes, bear markets have uptrends and downtrends like bull markets. Only the main direction of the overall market is in opposite direction.

SHORT TERM

Counting from the failed fifth, of the failed fifth at SPX 2104. We have an abc down to SPX 1993, an abc rally to 2082, and now a more complex abc decline to 1858 so far. Correct, I do not see any of these declines as impulse waves. Currently this second stronger decline is a near perfect double of the first decline, i.e. 224 points v 111 points. If Friday’s low does not hold, a 2.618 relationship would suggest a downtrend low around SPX 1791. There is not much else to go on at the moment except for the OEW pivots.

Short term support is at the 1869, 1841, 1828 and 1779 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum ended the week near neutral. Bear markets are usually quite turbulent and volatile events. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower on the week for a net loss of 3.5%.

European markets were also all lower for a net loss of 3.1%.

The Commodity equity group were all lower and lost 6.1%.

The DJ World index continues to downtrend and lost 3.0%.

COMMODITIES

Bonds are in an uptrend and gained 0.8% on the week.

Crude continues its downtrend and lost 6.7% on the week.

Gold is still in an uptrend but lost 1.4% on the week.

The USD is trying to uptrend and gained 0.4% on the week.

NEXT WEEK

Monday: holiday. Tuesday: the NAHB at 10am. Wednesday: the CPI, Housing starts, and Building permits. Thursday: weekly Jobless claims and the Philly FED. Friday: Existing home sales and Leading indicators. Best to your three day weekend and week!

CHARTS: http://stockcharts.com/public/1269446/tenpp

https://caldaro.wordpress.com

After about 40 years of investing in the markets one learns that the markets are constantly changing, not only in price, but in what drives the markets. In the 1960s, the Nifty Fifty were the leaders of the stock market. In the 1970s, stock selection using Technical Analysis was important, as the market stayed with a trading range for the entire decade. In the 1980s, the market finally broke out of it doldrums, as the DOW broke through 1100 in 1982, and launched the greatest bull market on record. 

Sharing is an important aspect of a life. Over 100 people have joined our group, from all walks of life, covering twenty three countries across the globe. It's been the most fun I have ever had in the market. Sharing uncommon knowledge, with investors. In hope of aiding them in finding their financial independence.

Copyright © 2016 Tony Caldaro - 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.

Tony Caldaro 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