Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

SPX New Highs, Correction Next?

Stock-Markets / Stock Markets 2016 Aug 20, 2016 - 06:22 PM GMT

By: Tony_Caldaro

Stock-Markets

The market started the week at SPX 2184, rallied to 2194 on Monday, pulled back to 2169 by Wednesday, then rallied to end the week back at 2184. For the week the SPX/DOW slipped 0.05%, and the NDX/NAZ were mixed. On the economic front positive reports continued to outpace negative ones. On the downtick: the NY FED and building permits. On the uptick: the NAHB, housing starts, industrial production, capacity utilization, the Philly FED, leading indicators, the Q3 GDP estimate, plus weekly jobless claims improved. Next week’s reports are highlighted by the Q2 GDP, durable goods and more housing reports. Best to your week!


LONG TERM: uptrend

For the past several months we have been carrying two potential counts for the long term trend. The popular NYSE primary V, and the not so popular, if not unknown, SPX primary B count. In the past several weeks we have added a third count, which we detailed last week: the DOW primary III count. Actually the primary III count, quantitatively, also fits the SPX/NDX/NAZ/W5K. But does not fit the NYSE. The reason we suspect, also noted last week, is that the NYSE reflects more of a worldwide index, with its ADR’s, than a US index.

This week we are moving the DOW P3 count from an alternate to the 50/50 probability SPX/NYSE counts, and giving it an equal probability. This upgrades all three counts to a 33% probability. While all three counts continue to suggest higher prices ahead one in particular stands out.

The NYSE P5 count fits better with the foreign indices than with the US market. And it is possible that the P3 and P4 in 2015 and 2016 are actually Major 1 and Major 2 of Primary III. It is not this count.

The SPX P B count still looks good, but historically it does not fit. Since 1932 there was only one time that a B wave made new all time highs, and that was in 1980 and only by 1%. At this week’s high the SPX was nearly 3% above the 2015 all time high. It is not this count.

The DOW P3 count is relatively unknown in EW circles. But it fits quantitatively with the NDX/NAZ/SPX/W5K, and is supported by historically reliable technical indicators. It suggests Cycle wave [1] did not end in 2015, and it will not end with a NYSE P5 either. Cycle wave [1] will continue to unfold for a number of years, as Primary waves III, IV and V work their way higher. This is the count that makes the most sense. We caution, however, that the SPX needs to clear 2336 (1.618 x P A) before we will make this count the main count. As always feel free to choose which of the three counts fits your particular views.

MEDIUM TERM: uptrend may have topped

The current uptrend that began in late-June at the Br-exit low appears to have completed five waves up from that low [1992]: 2109-2074-2178-2148-2194. Since the third wave (104 pts.) was shorter than the first wave (117 pts.), we were expecting an even shorter fifth wave. At SPX 2194 it is about 6 points short of a 0.50 x wave 3 Fibonacci relationship. So this one is quite short, but close to our minimum of SPX 2200 2 points.

Supporting this potential downtrend underway scenario are the abundance of negative divergences nearly across the board in the major indices. Daily charts in all the major indices are displaying negative divergences in the RSI and MACD. On the weekly charts the SPX/NDX/NAZ are quite overbought. The DOW weekly is displaying a negative RSI divergence, just like it did at the last uptrend high.

Should a downtrend be underway we would expect the market to find support between waves 1 and 2 of this uptrend SPX: 2074 and 2109. This would amount to about a 5% correction from the SPX 2194 high. Medium term support is at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots.

SHORT TERM

While waves 1 and 3 of this uptrend counted quite well impulsively, this fifth wave has been a choppy affair. We have counted from the SPX 2148 wave 4 low: 2188-2172-2194. Then the market dropped to SPX 2169, rallied to 2187, and dropped to 2175. Quite sloppy activity that looks mostly corrective.

Since the pattern for the fifth wave is not clear it is possible it could move marginally higher to complete an ending diagonal: wave a 2194, wave b 2169, wave c underway. This pattern would likely top around SPX 2200. Or the uptrend actually ended at SPX 2188, and everything after that is part of the next downtrend. Until the SPX actually declines to 2148 again the short term outcome is a bit uncertain. Either way a downtrend is underway, or should be underway soon. Short term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Short term momentum ended the week at neutral.

FOREIGN MARKETS

Asian markets for the week were mixed and ended about unchanged.

European markets were all lower and lost 2.5%.

The Commodity equity group were mixed but gained 0.8%.

The DJ World index lost 0.1%.

COMMODITIES

Bonds continue to downtrend and lost 0.5% on the week.

Crude soared 10.4% on the week.

Gold is still in an uptrend and gained 0.2%.

The USD is still in a downtrend and lost 1.3%.

NEXT WEEK

Tuesday: new home sales. Wednesday: FHFA housing prices and existing home sales. Thursday: weekly jobless claims and durable goods orders. Friday: Q2 GDP 2nd est. +1.1%, consumer sentiment, and a Jackson Hole speech from FED chair Yellen.

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