Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
EU Referendum, Black Vote LEAVE or REMAIN? Which is Worse for Racism for Britain's Ethnic Minorities? - 29th May 16
Billionaire Gross: Jubilee Debt Relief as Prelude to New Global Economic Order - 29th May 16
Wargaming North Korea - Assessing the Threat - 29th May 16
EU REMAIN Population Forecasts - England 4.1 million Explosion, London Migration Crisis - 28th May 16
A Guide to the Trump-Sanders Debate - 28th May 16
Gold And Silver – At Significant Support. New “Story” Developing - 28th May 16
The Next Systemic Lehman Event - New Scheiss Dollar & Gold Trade Standard - 27th May 16
Energy and Debt Crisis Point to Much Higher Silver, Metals Prices - 27th May 16
Gold Junior Stocks Q1 2016 Fundamentals - 27th May 16
These Crisis Markets Are Primed to Deliver Big Gains, Platinum Never Cheaper! - 27th May 16
Operation Black Vote BrExit Warning for the Wrong EU Referendum - 27th May 16
UK Immigration Crisis Hits New Extreme, Catastrophic ONS Migration Stats Ahead of EU Referendum - 27th May 16
Many of the World’s Best Investors Made Their Fortunes This Way…And You Can Too - 27th May 16
The Ugly Truth About Stock Market Manipulation and Gold Prices - 27th May 16
Gold Price Looking Vulnerable While Gold Stocks Correct - 27th May 16
The 5 Fatal Flaws of Trading - 27th May 16
The Next Big Crash Of The U.S. Economy Is Coming, Here’s Why - 27th May 16
A New Golden Bull or Has the Market Gone Too Far Too Fast? - 27th May 16
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Stocks Bear Market Continues

Stock-Markets / Stock Markets 2016 Feb 07, 2016 - 01:10 PM GMT

By: Tony_Caldaro

Stock-Markets

The market started the week at SPX 1940. On Monday the market rose to SPX 1947 and then traded down to 1872 by early Wednesday. Then the market rallied to SPX 1927 early Thursday, only to selloff again and end the week at SPX 1880. For the week the SPX/DOW lost 2.35%, the NDX/NAZ lost 5.70%, and the DJ World index lost 2.20%. Economic reports for the week were again biased negatively. On the uptick: personal income, construction spending, consumer credit, Q1 GDP, plus the unemployment rate improved. On the downtick: ISM manufacturing/services, the ADP, factory orders, monthly payrolls, the WLEI, plus weekly jobless claims and the trade deficit worsened. Next week will be highlighted by FED chair Yellen’s semiannual monetary policy report to Congress.


LONG TERM: bear market

During the entire six year bull market, the longest period between new highs was May 2011 to Feb 2012. During that period Primary I had topped in May, Primary II bottomed in October, and the market was solidly in an uptrend from a December low that would last until April 2012. Currently the market made its highest price in May 2015, sold off until August, made a lower high in October, and then an even lower low in January. The price action since May looks more like a bear market than anything that occurred during the bull market. We continue to see a Cycle wave [2] bear market underway.

The six year bull market completed its expected five Primary wave advance with a somewhat abrupt ending. Primary waves I and II completed in 2011, and Primary waves III, IV and V completed in 2015. Primary V, however, impulse higher in a strong uptrend but failed to make new all time highs by about 1%. This completed Cycle wave [1] and a Cycle wave [2] bear market is now underway. Cycle waves typically lose 45% to 50% of market value before they bottom. This would suggest a low around SPX 1100, more or less, by sometime in 2017. The decline may be a simple zigzag, or a complex three. With only one confirmed downtrend underway it is still too early to determine the pattern.

MEDIUM TERM:

After the Primary IV low at SPX 1867 in August, the market rallied in five impulse waves SPX: 1993-1872-2116-2019-2104. The fifth wave failed to make a higher high falling short of the third wave at SPX 2116. Also this Primary V uptrend fell short of the bull market high at SPX 2135. So in effect the bull market ended with a failed fifth of a failed fifth wave. This was quite an abrupt ending to what had been a very good bull market, i.e. the SPX more than tripled in the six years.

After Primary V ended the market entered a three wave downtrend, made lower lows, and hit SPX 1812 in mid-January. Then with a positive daily RSI divergence, and a quite oversold MACD we expected the first uptrend of the bear market. After about 2.5 weeks of market activity, and a 135 point rally to SPX 1947, the advance is not looking like what we had expected. While the SPX/DOW are still well above their mid-January lows, the NDX/NAZ are both getting quite close to making lower lows. This should not be happening during an uptrend.

At the mid-January lows we expected an uptrend to unfold, with a worse case trading range during the month of February. This can still occur. But if the market breaks down much further we have to accept that the downtrend from the Primary V high is still underway. We had counted the three waves into the SPX 1812 low as corrective. Suggesting the market is not impulsing down, but unfolding in a more complex set of a-b-c’s. Should the downtrend extend we will be forced to find a new short term wave filter, since the bull market’s filter will no longer be in effect. Medium term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots.

SHORT TERM

Tracking the SPX/DOW, in isolation of the NDX/NAZ, the waves have been unfolding somewhat as expected. After a potential Major wave A downtrend low at SPX 1812, the market has rallied in an expected Major wave B uptrend to SPX 1947. Since we have not confirmed that the downtrend has ended, we labeled that low with a tentative green Major A. The rally to SPX 1947 has not confirmed an uptrend either, so we are stuck, at this point, with two tentative green labels. Should the downtrend resume we will have the answer to this dilemma. Should the market stay in a trading range the trend confirmations will come eventually.

Remaining with the current labeling, we have counted three Intermediate waves up to SPX 1947 Major B wave high: 1909-1874-1947. After that we counted three wave down for Minor a of Intermediate A SPX: 1897-1914-1872. Minor b was also three waves SPX: 1918-1901-1927. This count suggests Minor wave c of Intermediate A is currently underway. Should Minor c = Minor a, then the market should find support around SPX 1852. Anything lower than that would suggest the initial downtrend is resuming.

One other possibility, since the market has now found support on four separate occasions in the SPX 1870’s, (twice last week and twice this week), Major wave B may be much more complex. For now we would expect the market to drop to around SPX 1852 before it starts to rally in an Intermediate wave B. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum ended the week quite oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were quite mixed for a net loss of 0.3%.

European markets were all lower and lost 5.5%.

The Commodity equity group was mixed and lost 0.7%.

The DJ World index remains in a downtrend and lost 2.2%.

COMMODITIES

Bonds continue to uptrend and gained 0.6%.

Crude is still in a downtrend and lost 8.1%.

Gold is still in an uptrend and gained 5.0%.

The USD is in a downtrend and lost 2.6% on the week.

NEXT WEEK

Tuesday: Wholesale inventories. Wednesday: testimony from FED chair Yellen before Congress, and the Budget deficit. Thursday: testimony continues before the Senate, and weekly Jobless claims. Friday: Export/Import prices, Retail sales, Business inventories and Consumer sentiment. Best to your 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