Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Gold and Understanding the Current Investment Reality - 10th Apr 20
See a Stock Price Gap? Learn to Capitalize on Them - 10th Apr 20
A Rare Bottoming Pattern on the HUI Gold Stocks? - 10th Apr 20
Here Comes Another $2T Support for Stocks - 10th Apr 20
Expectations For Higher Gold Prices – Fly In The Ointment - 10th Apr 20
Redefining Political Economy, Globalization & Business Models Consequent on Corona Virus Pandemics - 9th Apr 20
Plus500 Rreview - 9th Apr 20
Gold Price Closely Tracks Debt-to-GDP Ratio - 9th Apr 20
Gold, Silver and Rigged Market Socialism - 9th Apr 20
Going to School in Lockdown Britain, Dobcroft Sheffield - 9th Apr 20
Amazon Face Masks to Protect Against Covid-19 Viral Particles N95, FPP2, PM2.5, for Kids and Adults - 9th Apr 20
Is Natural Gas Price Ready For An April Rally? - 8th Apr 20
Market Predictions And The Business Implications - 8th Apr 20
When Will UK Coronavirus Crisis Imrpove - Infections and Deaths Trend Trajectory Analysis - 8th Apr 20
BBC Newsnight Focuses on Tory Leadership Whilst Boris Johnson Fights for his Life! - 8th Apr 20
The Big Short Guides us to What is Next for the Stock Market - 8th Apr 20
USD Index Sheds Light on the Upcoming Gold Move - 8th Apr 20
The Post CoronaVirus New Normal - 8th Apr 20
US Coronavirus Trend Trajectory Forecast Current State - 7th Apr 20
Boris Johnson Fighting for his Life In Intensive Care - UK Coronavirus Crisis - 7th Apr 20
Precious Metals Are About To Reset Like In 2008 – Gold Bugs, Buckle Up! - 7th Apr 20
Crude Oil's 2020 Crash: See What Helped (Some) Traders Pivot Just in Time - 7th Apr 20
Was the Fed Just Nationalized? - 7th Apr 20
Gold & Silver Mines Closed as Physical Silver Becomes “Most Undervalued Asset” - 7th Apr 20
US Coronavirus Blacktop Politics - 7th Apr 20
Coronavirus is America's "Pearl Harbour" Moment, There Will be a Reckoning With China - 6th Apr 20
Coronavirus Crisis Exposes Consequences of Fed Policy: Americans Have No Savings - 6th Apr 20
The Stock Market Is Not a Magic Money Machine - 6th Apr 20
Gold Stocks Crash, V-Bounce! - 6th Apr 20
How Can Writing Business Essay Help You In Business Analytics Skills - 6th Apr 20
PAYPAL WARNING - Your Stimulus Funds Are at Risk of Being Frozen for 6 Months! - 5th Apr 20
Stocks Hanging By the Fingernails? - 5th Apr 20
US Federal Budget Deficits: To $30 Trillion and Beyond - 5th Apr 20
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition - 5th Apr 20
Visa Denials: How to avoid it and what to do if your Visa is denied? - 5th Apr 20 - Uday Tank
WARNING PAYPAL Making a Grab for US $1200 Stimulus Payments - 4th Apr 20
US COVID-19 Death Toll Higher Than China’s Now. Will Gold Rally? - 4th Apr 20
Concerned That Asia Could Blow A Hole In Future Economic Recovery - 4th Apr 20
Bracing for Europe’s Coronavirus Contractionand Debt Crisis - 4th Apr 20
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20

Market Oracle FREE Newsletter


Stock Market New Top Forming?

Stock-Markets / Stock Markets 2016 Aug 15, 2016 - 11:07 AM GMT

By: Andre_Gratian


Current Position of the Market

SPX Long-term trend: The long-term trend is up but weakening.  Potential final phase of bull market.

SPX Intermediate trend: The uptrend from 1810 continues.  It could soon enter a corrective phase.

Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know at

New top forming?

Market Overview

Last Friday, the better than expected jobs report moved SPX to a new high of 2185.  However, it seems to have a problem following through after that move.  This past week, the index had a minor correction which was followed by a new high to 2188, but that was it! Sellers appeared and drove prices back down. This action is causing bearish divergence in the daily and hourly indicators, and even the weekly indicators have gone flat and could turn down at any time.  Last week, I suspected that a new top was forming and nothing has occurred to change my mind.  This is why I kept the same title for this newsletter.

Erik Hadik’s explanation for the market’s behavior is that we are at the top of some important cycles which, if they take hold, could drive prices down for an intermediate period of time.  Seasonally, this makes sense and I would not be surprised if we corrected the advance from 1992 with a decent decline into October.

This time, for the sake of variety, I am showing the BPNDX (courtesy of  Although the COMP did not make a new high, it came very close to doing so, but its BPNDX was not impressed.  It kept going sideways while its RSI and MACD are beginning to roll over.  No bullish pattern here, either!

SPX Chart Analysis

Daily chart

If you are wondering why SPX cannot rise more than a few points before pulling back, just look at the dashed blue line on the chart.  This is a parallel of the trend line labeled “intermediate trend line”, above.  It is drawn at the top of the April rally and has acted as a line of resistance for the past five weeks.  If we cannot break through it on the upside, when the next intermediate cycle turns down the index should start to pull away from it, as it did a couple of weeks ago, except that this time, if Eric Hadik is right, we will not stop after a decline of two or three days, but should continue until the next level of support which is the former top at 2135, and perhaps even a little lower, at the highs of the two previous short-term tops.

It’s probably too early to go down and challenge the new black trend line from the 1810 low.  There was enough accumulation at that low to take the index to the mid-2200s, and if we do correct into October, by the time we make another new high, the dashed blue line may have progressed upward to that price level; and this time, it could put an end to the bull market -- if we are indeed currently in primary wave V.  But this is not something that we need to decide today.

The crawling pattern made by the index is reflected in the oscillators at the bottom of the chart.  All show negative divergence and even though the SRSI is still in an uptrend, it has reached an overbought level and could turn down as soon as we get a couple of downticks in price.  Perhaps breaking the minor trend line (which makes a wedge with the blue line) will get something started.  If not, penetrating the moving averages certainly will.

This chart and others below, are courtesy of

Hourly Chart

The top dashed line on the daily chart has become a heavy blue line on this chart.  We can see that except for a brief move outside of the line on 7/20, most other advances were pushed back on contact.  I have drawn a parallel heavy line at the first pull-back.  It has acted as the bottom of a narrow channel  which has contained the downside price excursions except for the one time that the index expanded the original channel by 1.382 before moving back into the original one.  That channel is still relevant and prices will have to break out of it in order to extend the rally.  If it falls through the bottom of the first channel, it will probably challenge the new line at the bottom.  Continuing lower should confirm that an intermediate downtrend has taken hold.

The hourly indicators are all showing bearish divergence although it looks as if a final attempt is going to be made to move higher.  All the oscillators have started to turn up.  For prices to break down convincingly, they will have to go through the black trend line as well as the red horizontal line.

Some leading & confirming indexes (Weekly)

Here is a display of various market components which play a key role in determining the market’s overall position.  In the top row are those which have made a new high.  Oddly enough, TLT is one of them.  This alone should tell you that we are not in a normal bull market.  The bottom row includes all the laggards from the NYA, which is the most diverse index, to the TRAN which is badly lagging the DJIA.  According to the DOW Theory, this means that this bull market should be close to the end of the road.

UUP (dollar ETF)

UUP continues its correction and has retraced back to a support line from which it may attempt to resume its uptrend.  If it does, it will face several resistance challenges directly above.  Let’s see how it fares, but if it succeeds it could have an effect on gold which looks ready to correct.

GDX (Gold Miners ETF)

GDX has entered the deceleration stage of its uptrend from its 12.40 low.  The accumulation pattern which had formed at that level had a count of about 30-31, which has been met.  Strong bearish divergence in the oscillators suggests that it has started a period of distribution which should be followed by a correction.

Note: GDX is now updated for subscribers throughout the day along with SPX, on

USO (US Oil Trust)

USO is acting predictably.  It has found support at the bottom of its channel and bounced.  Since it has not yet reached its projections of 8.5 to 9.00 for a final low, odds favor another retracement which should also bottom above the lower channel line and create divergence in the oscillators before a new uptrend can get underway.


Last week’s price action by SPX has done nothing to deter the perception that another, more important top, which could lead to an intermediate decline, is currently forming.



If precision in market timing for all time framesis something that you find important, you should

Consider taking a trial subscription to my service.  It is free, and you will have four weeks to evaluate its worth.  It embodies many years of research with the eventual goal of understanding as perfectly as possible how the market functions.  I believe that I have achieved this goal. 


For a FREE 4-week trial, Send an email to:


For further subscription options, payment plans, and for important general information, I encourage

you to visit my website at It contains summaries of my background, my

investment and trading strategies, and my unique method of intra-day communication with

subscribers. I have also started an archive of former newsletters so that you can not only evaluate past performance, but also be aware of the increasing accuracy of forecasts.


Disclaimer - The above comments about the financial markets are based purely on what I consider to be sound technical analysis principles uncompromised by fundamental considerations. They represent my own opinion and are not meant to be construed as trading or investment advice, but are offered as an analytical point of view which might be of interest to those who follow stock market cycles and technical analysis.

Andre Gratian Archive

© 2005-2019 - 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