Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
Fundamentals for Uranium look great; is the Uranium Market ready to soar? - 29th Aug 16
3 Ways to Profit from the Stressed-Out American Consumer - 29th Aug 16
Have The Markets Become Too Big to Fail? - 29th Aug 16
Pakistan Booming House Prices Housing Market Mania Kabza Mafia Warning! - 29th Aug 16
Post Yellen = Market Confusion - 28th Aug 16
Theresa May Instructs Police, NHS Gp's, Public Sector To Stop Racial Discrimination in Service Delivery - 28th Aug 16
Ignore Yellen and Buy the Dip in Precious Metals - 27th Aug 16
SPX Downtrend Should be Underway - 27th Aug 16
Unraveling the Secular Economic Stagnation Story - 27th Aug 16
The Precious Metals Sector and the Fed. . . - 27th Aug 16
Stock Market - All Is Calm, All Is Not Right - 27th Aug 16
Gold Junior Stocks Q2 2016 Fundamentals - 26th Aug 16
Buy Gold’s August Dip? Gold’s Monthly Sweet Spot In September - 26th Aug 16
The IMF’s Internal Audit Reveals Its Incompetence and Massive Rule Breaking - 26th Aug 16
Commodities Are the Best Bargain Now—Here’s What to Buy - 26th Aug 16
Why I Left Canada and Became A Citizen of the Dominican Republic - 26th Aug 16
The GLD vs GOLD - 26th Aug 16
Can Stocks Survive Without Stimulus? - 25th Aug 16
Why Putin Might Be on His Way Out - 25th Aug 16
Bond Guru Gary Shilling - The Bond Market Rally of a Lifetime - 25th Aug 16
A Zombie Financial System, Black Swans and a Gold Share Correction - 25th Aug 16
OPEC’s Output Freeze: What Has Changed Since Doha? - 25th Aug 16
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16
Vauxhall Zafira Fires - Second Recall Issued - Inspection Before Bursting into Flames? - 21st Aug 16
Will the Stock Market Bubble Pop Regardless if the FED Never Raises Rates? - 21st Aug 16
US Government Spending - 3 Big Stories Not Being Covered – Part III - 21st Aug 16
Silver Analysis - 20th Aug 16
SPX New Highs, Correction Next? - 20th Aug 16
Housing Bubble - The Marginal Buyer Holds The Pin That Pops Every Asset Bubble - 20th Aug 16
Gold Miners Q2 2016 Fundamentals - 19th Aug 16
Which Price Ratio Matters Most in a Fiat Ponzi? - 19th Aug 16
Big Policies, Bigger Failures - 19th Aug 16
Higher Crude Oil’s Prices and USD/CAD - 19th Aug 16
Here’s Why You Should Look for Dividend Stocks and How - 19th Aug 16
Deglobalization Already Underway — 4 Technologies That Will Speed It Up - 19th Aug 16
These 6 Charts Show Why the Average American Is Fed Up - 18th Aug 16
SPX Easing Lower - 18th Aug 16
Low / Negative Interst Rate’s Legacy - 18th Aug 16
The 45th Anniversary of The Most Destructive Event In Modern Monetary History - 18th Aug 16
USDU - An Important Perspective on the US Dollar - 17th Aug 16
SPX Completes Wave 1 Decline - 17th Aug 16
How to Quickly Spot Common Fibonacci Ratios on a Chart - 17th Aug 16
When Does a Forecast Become a Trade? - 17th Aug 16
Kondratiev Wave - The Financial Winter Is Nearing! - 17th Aug 16
Learn "The 4 Best Elliott Waves to Trade -- and How to Trade Them" - 16th Aug 16
Stock Market Bears Turning Bullish At New All Time Highs - Time to Get Worried? - 15th Aug 16
Job Seekers Sacrificed to the Inflation Gods - 15th Aug 16
A Look At Commodities and Financial Markets Trading Week Ahead - 15th Aug 16
Stock Market New Top Forming? - 15th Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy - 3 Secret Charts

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

© 2005-2016 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