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
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

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

Stock Market Volatility Continues

Stock-Markets / Stock Markets 2016 Jul 02, 2016 - 12:35 PM GMT

By: Tony_Caldaro

Stock-Markets

The market started the week at SPX 2037. After a gap down opening to start the week, and a decline to SPX 1992, the market reversed and rallied quite strongly for the rest of the week. The two day post Br-exit decline from SPX 2113-1992, was nearly fully retraced when the market hit SPX 2109 on Friday. For the week the SPX/DOW gained 3.2%, and the NDX/NAZ gained 3.4%. Economic reports for the week were positive. On the downtick: pending home sales, construction spending, plus weekly jobless claims and the trade deficit rose. On the uptick: Q1 GDP, consumer confidence, personal income/spending, the PCE, the Chicago PMI and ISM manufacturing. Next week’s reports will be highlighted by monthly Payrolls and the FOMC minutes.


LONG TERM: neutral

Took a look at the history of the DOW from 1900-present. Found two periods when the DOW confirmed a bear market, then spent over one year flirting with potential new highs. The two instances are of different wave degrees, but are similar to the current market we have been experiencing since the May 2015 high.

The first one is the 1956-1957 bear market. After a three year bull market in which the DOW doubled, the market spent 15 months attempting to make new highs. Notice it had four uptrends during that period, and all failed to make new highs. Then after failing on its last, and strongest, attempt it broke to lower lows.

The second one is the 2000-2002 bear market. This bear market followed an extraordinary, record breaking, 13-year bull market when the DOW rose from 1,616 – 11,750. Notice after the top it had five uptrends during the following 16 month period, and all failed to make new highs as well. Then after failing on its last attempt, and strongest, it broke to lower lows.

Our current market has done something quite similar. After a six year bull market in which the SPX tripled, the market has spent the last 13 months attempting to make new highs. Notice since the May 2015 high at SPX 2135 the market has had four uptrend attempts to make new highs and all have fallen short: 2133, 2116, 2111 and 2121. Until the market breaks through to new highs we remain long term neutral.

MEDIUM TERM: uptrend probably underway

This weeks activity generated a WROC signal. These signals usually occur before OEW confirms and uptrend, and are 96% accurate during bull markets. During bear markets the accuracy drops to about 75%, as some bear market rallies can trigger WROC signals. As a result probabilities suggest an uptrend is now underway.

We continue to count the three wave advance from SPX 1810-2121 as an a-b-c Major wave B. The recent decline to SPX 1992 should have started Major wave C. But the market rallied strongly this week, nearly retracing that entire decline. Should the market confirm an uptrend, and exceed the actual SPX 2135 all time high, then Major wave B is probably subdividing and extending. This would also suggest Primary wave V is underway in the NYSE index.

As we have been noting for a couple of months now. A Primary V in the NYSE to new highs, and an irregular Major wave B in the four major indices, would put all five of these indices back in alignment. Even though the SPX/DOW/NDX/NAZ would be labeled B wave advances. The NAZ daily chart is carrying this potential subdividing/extending Major wave B count. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 pivot.

SHORT TERM

The market has been quite volatile since the June uptrend high at SPX 2121. The market first declined to SPX 2050, rallied all the way back to SPX 2113, then declined to SPX 1992 just this Monday. We labeled that decline with three Minor waves creating Intermediate wave A. Then from Monday’s low to Friday the market rallied back to SPX 2109. We had anticipated an Intermediate wave B rally if the market cleared the 2043 pivot. But thought the rally would be limited to the 2085 pivot range. When there wasn’t even a notable pullback at that area we knew the market was heading higher.

Thus far we can count four waves up from the SPX 1992 low: 2027-2016-2109-2099. Should the market rally back to SPX 2109, or higher, then the entire rally would look impulsive. If not, then it is just another corrective rally in this ongoing choppy market. With US markets closed on Monday anything is possible by time it opens again on Tuesday. Short term support is at the 2085 and 2070 pivots, with resistance SPX 2113 and SPX 2121. Short term momentum ended the week declining from an extremely over bought condition.

FOREIGN MARKETS

Asian markets were all higher gaining 3.3% on the week.

European markets were also all higher and gained 4.2% on the week.

The Commodity equity group were all higher gaining 2.6% on the week.

The DJ World index gained 3.5% on the week.

COMMODITIES

Bonds continue to uptrend and gained 0.5% on the week.

Crude still looks like it is entering a downtrend but gained 3.0%.

Gold continues to uptrend and gained 1.5%.

The USD is also uptrending and gained 0.2%.

NEXT WEEK

Monday: holiday. Tuesday: Factory orders. Wednesday: ISM services, the FOMC minutes, and FED governor Tarullo gives a speech. Thursday: the ADP and weekly jobless claims. Friday: monthly Payrolls and consumer credit. 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

© 2005-2019 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