Best of the Week
Most Popular
1.US Dollar Crashes, Gold And Bitcoin Skyrocket As Economic Recovery Lie Is Exposed - Jeff_Berwick
2.Now Obama Warns Americans to ‘Be Prepared’ for Disaster… What Does He Know? - Jeff_Berwick
3.EU Referendum - Britain's Immigration / Migrant Crisis Explained - Nadeem_Walayat
4.EU Referendum - British People vs Establishment Elite, Vote LEAVE an Act of Defiance! - Nadeem_Walayat
5.Prominent Billionaire Investors Warn of Financial Crash, Quietly Position Themselves - MoneyMetals
6.Bankers Warn of BrExit Financial Armageddon if British People Vote for Freedom - Nadeem_Walayat
7.Bad U.S. Jobs Report Prompts Stocks Bear Market Rally Towards New All Time Highs! - Nadeem_Walayat
8.Gold And Silver – Friday May Have Marked A Pivotal Turnaround - Michael_Noonan
9.EU Referendum - British People vs Establishment Elite, the Illusion of Democracy and Freedom - Nadeem_Walayat
10.Felix Zulauf: Monetary Stimulation Creates Bubbles, Not Prosperity Nor Growth - GoldandLiberty
Free Silver
Last 7 days
Gold And Silver: Security, And BREXIT - 25th June 16
Dow, Euro & Brexit Recap - 25th June 16
Resistance Holding Gold Stocks after Brexit - 25th June 16
Venezuela vs. Ecuador (Chavismo vs. Chavismo Dollarized) - 25th June 16
Gold, Silver And PM Stocks Summer Doldrums Risk - 24th June 16
Here’s Why China “Economic Hard-Landing” Worries Are Overblown - 24th June 16
Jubilee Jolt: Markets Crash, Gold Skyrockets as Britain Takes Brexit - 24th June 16
BrExit Morning - New Dawn for Britain, Independence Day! - 24th June 16
LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - 24th June 16
Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - 24th June 16
EU Referendum Shock Results Putting BrExit LEAVE in the Lead Hitting Sterling Hard - 24th June 16
Final Opinion Poll Gives REMAIN 52% Lead, Bookmakers, Markets and Pollsters ALL Back REMAIN Win - 23rd June 16
Does BREXIT Matter? Outlook for Sterling - 23rd June 16
Keep Calm and Vote BrExit - Last Chance to Break Free of EU Superstate - 23rd June 16
Here’s the Foreign Policy Trump and Clinton Really Want - 23rd June 16
Details Behind Semiconductor Stocks Leadership - 23rd June 16
Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - 23rd June 16
BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - 22nd June 16
Proof that the Gold Bears are Wrong - 22nd June 16
Here’s a Trillion-Dollar Investment Opportunity for Those Few with No Debt - 22nd June 16
BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - 22nd June 16
Increase In U.S. Rig Count Will Not Cap Oil Prices - 22nd June 16
Are Copper and China Stocks Set to Rally? - 22nd June 16
SPX May Break Its Trendline - 22nd June 16
Believe it or Not: More Kids Live At Home Now than Since The Great Depression - 21st June 16
EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - 21st June 16
British Pound Outlook - BREXIT, Europe and You - Does your vote matter? - 21st June 16
Fascist Victory Behind the European Union - 21st June 16
EU Referendum Opinion Polls Analysis Shows Strong Momentum in REMAINs Favour - 21st June 16
Is It Time to Dump Gold and Buy Platinum? - 21st June 16
Could Central Bankers Be Gold and Silver's BIGGEST Allies? - 20th June 16
Words Still Mean Things – Brexit With Graham Mehl - 20th June 16
Baroness Warsi the Manchurian Candidate Quits LEAVE for REMAIN, Boris Johnson Next? - 20th June 16
FTSE Soars, Stock Markets Bounce on LEAVE Polls Surge, Bookmakers Widen BrExit Odds - 20th June 16
Brexit Would Trigger Devolution of Europe - 20th June 16
Stock Market Week Of Uncertainty - 20th June 16
Will Gold’s Bullish Price Chart Outperform Gold’s 5 Bearish Indicators? - 20th June 16
Bonds And Stocks At All-Time Highs: Are Markets Confused Or Broken? - 20th June 16
Silver Sleeping On the Job - 19th June 16
BrExit Odds Sink, REMAIN Polls Boost by Jo Cox Killing by Radical Right Extremist, Conspiracy? - 19th June 16
How Elliott Waves Tell You When to "Jump In" & When to "Jump Out" of Markets - 18th June 16
Stock Market Inflection Point During Bifurcation - 18th June 16
Gold And Silver – Insanity Is World “Norm.” Keep Stacking! - 18th June 16
Gold Stocks - Bull Markets that Follow Epic Bears - 18th June 16
The Fed Giveth and the Gold Bullion Banks Taketh Away… - 17th June 16
Brexit: "The Vote Heard Around the World" - 17th June 16
Gold Stocks Summer Breakout? - 17th June 16
Stock Investors Get Higher Returns and More Dividend Income - In Less Time With Less Risk - 17th June 16
How to Use the Gold-to-Silver Ratio? - 17th June 16
Inflation, Deflation & Associated Trading Prospects - 17th June 16
Overnight Markets Struggling to Stay Flat - 17th June 16
Gold Price Surges to Highest in Nearly Two Years On Central Bank and Brexit Haven Demand - 17th June 16
Stock Market Thinking Upside Down; Dow 18k Still Key - 17th June 16
Jo Cox MP Terror Attack Killing Claimed for "Britain First" - Witness Report - 17th June 16
Stock Market, Iron Ore, Bitcoin – Is Silver Next for Chinese Momentum Investors? - 16th June 16
EU Referendum Campaigning Suspended Following Shooting of MP Jo Cox, Suspect Named as Tommy Mair - 16th June 16
Why People are Migrating to the UK, Illegal Immigration, Housing Crisis Consequences - 16th June 16
Stocks Fluctuate Following Recent Decline - Bottom Or Just Pause Before Another Leg Down? - 16th June 16
The US Consumer-Driven Economy Has Hit a Brick Wall - 16th June 16
Bitcoin Price Going Parabolic Again, Now At $730 and Up 60%+ In Last Three Weeks - 16th June 16
China's Hard Landing Has Already Begun! - 16th June 16
Crude Oil Price - Oil Bears vs. Support Zone - 16th June 16
Central Bankers Are Wrong About Inflation and Deflation - 15th June 16
Alignment Of The Dow, Interest Rates, Debt and Silver Cycles Will Deliver A Fatal Blow - 15th June 16
Stock Market Bounce May be Over - 15th June 16
EU Referendum: Have the Bookmakers Got it Wrong? LEAVE Opinion Polls Lead - 15th June 16
Gold Price Rally - 15th June 16
How to Invest for Brexit Report - 15th June 16
Stock Market Short of the Decade? - 15th June 16
Stock Market Sell Off Coming! - 14th June 16
QE - The Good, Bad & Ugly - 14th June 16
This Demographic Shift Makes Our Social Security Useless - 14th June 16
Gold Stocks Ultimate Objective in a World of Monetary Transition - 14th June 16
Philosophy of the New World Order - 14th June 16
The Brexit Game - Boris Johnson vs David Cameron EU Referendum Zombies - 14th June 16
EU Referendum: LEAVE Opinion Poll Lead of 51% to 49% Whilst Bookmaker Odds Still Strongly Favour REMAIN - 14th June 16
George Soros Making Big Bets on Gold - 14th June 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Stocks Bear Market Rally Underway

Stock-Markets / Stocks Bear Market Jan 30, 2016 - 04:39 PM GMT

By: Tony_Caldaro

Stock-Markets

Another volatile week! The week started off at SPX 1907, traded down to 1876 on Monday, then rallied to 1917 on Wednesday before the FOMC statement. After the statement was released the market traded down to SPX 1873, retested that low on Thursday, then rocketed higher on Friday to end the week at SPX 1940. For the week the SPX/DOW gained 2.05%, the NDX/NAZ gained 0.50%, and the DJ World index gained 2.10%. Economic reports for the week were positive. On the uptick: Case-Shiller, the FHFA, consumer confidence, new/pending home sales, the Chicago PMI, plus weekly jobless claims improved. On the downtick: durable goods, Q4 GDP, consumer sentiment and the WLEI. Next week we get reports on the PCE, the ISM’s and monthly Payrolls.


LONG TERM: bear market

After an unorthodox ending to a six year bull market, a bear market began in December 2015. Thus far it appears the market has completed its first wave down, Major wave a, of the bear market when it declined from the uptrend high at SPX 2116 to SPX 1812 in January. Since that low the market rallied to SPX 1909, struggled to make much progress for several days, and then rallied to SPX 1940 on Friday. This choppy nearly 130 point rally appears to be Major wave b, or the first uptrend of the bear market.

Typically uptrends during bear markets retrace anywhere from 38.2% to 61.8% of the previous, or larger, decline. The three retracement levels, as noted last week, suggested the following potential uptrend highs: 1928 (38.2%), 1964 (50.0%) and 2000 (61.8%). Anything more than that would be quite unusual. We had noted, also last week, that the first two levels were near the OEW 1929 and 1956 pivots. On Friday the lower level was easily exceeded, so the next likely upside target is the 1956 pivot range.

After this uptrend concludes, which may be soon, we expect the next downtrend, Major wave c, to start off in a choppy pattern and then to make new lows in March. When this begins we can then start to make some downside projections for its low. Bear markets are usually quite volatile in both directions. Uptrends are often good times to unload selective stocks, and/or hedge existing positions. Downtrends are often quite breathtaking. Since this is the first uptrend of the bear market it is probably the last opportunity to take advantage of higher prices.

MEDIUM TERM: potential uptrend underway

After the unorthodox bull market high at SPX 2104 we labeled the Major wave a downtrend to SPX 1812 as a complex zigzag: Int. a SPX 1993, Int. b SPX 2082, and Int. c SPX 1812. At the low the daily MACD was quite oversold, and the RSI set up a positive divergence. This is usually a sign that a downtrend may be ending in favor of a counter-trend uptrend. The market then rallied nearly 100 points in two days, kicking off the uptrend. And on Friday added to those gains.

While the downtrend took about 1.5 months to unfold, which is about normal these days. Uptrends during bear markets are usually quite a bit shorter. This potential uptrend has rallied nearly 140 points in just 8 days and is already nearing its upside retracement targets. Three of the five uptrends during the last bear market only lasted 2 – 4 weeks. And, the two that lasted longer were either retracing a larger pattern or a very steep decline. Neither of which has occurred yet in this bear market.

One last note. Typically during bear market uptrends they only manage to get slightly RSI overbought on the daily chart. The RSI is currently quickly approaching that level. Medium term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots.

SHORT TERM

After the Major wave A low we started labeling the Major B uptrend with three Intermediate waves: a-b-c. Intermediate wave a was a bit choppy, unfolded in an a-b-c, (1890-1860-1909), and topped at SPX 1909. Then we had a quite tricky Intermediate wave b, thanks to the reaction after the FOMC, that took the form of an irregular a-b-c pattern: 1876-1917-1873. Intermediate wave c kicked in off that low and has already unfolded in three waves: 1899-1886-1940. Although the last wave may not yet be complete.

When we compare Intermediate waves C and A during this uptrend, the mostly likely Fibonacci target is SPX 1971. This is where Int. C = Int. A. The other Fibonacci relationships have already been exceeded. Overall we are now looking at three possible levels to end this uptrend: OEW 1956 and 1973 pivots, and SPX 2000. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum ended the week extremely overbought. A short term negative divergence, and a medium term overbought condition could fit quite well for an uptrend high. Best to your trading!

FOREIGN MARKETS

Asian markets were nearly all higher on the week for a net gain of 1.3%.

Europe markets were also almost all higher for a gain of 1.2%.

The Commodity equity group were all higher and gained 5.5%.

The DJ World index appears to be uptrending and gained 2.1%.

COMMODITIES

Bonds continue to uptrend and gained 1.0% on the week.

Crude is trying to uptrend and gained 4.3% on the week.

Gold continues to uptrend and gained 1.7% on the week.

The USD confirmed its uptrend but only gained 0.1% on the week.

NEXT WEEK

Monday: the PCE and Personal income/spending at 8:30, Construction spending and ISM manufacturing at 10am, then a Monetary policy discussion at the CFR with FED vice chair Fischer at 1pm. Tuesday: Auto sales. Wednesday: the ADP, and ISM services. Thursday: weekly Jobless claims and Factory orders. Friday: monthly Payrolls, the Trade deficit and Consumer credit.

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