Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18
Stock Market Investing 2018 - “I Hope I’m Making a Bad Buy” - 11th Jan 18
S&P 500 Fluctuates As Stock Market May Be Topping, Or Not? - 11th Jan 18
SPECTRE Microprocessor Security Flaw - Big Brother = You - 11th Jan 18
7 Market Forecasts 2018 from the Brightest Financial Minds I Know - 11th Jan 18
It’s Not Enough to Be Contrarian - 11th Jan 18
Stocks That Take One for A Roller Coaster Ride Through the Thick And Thin Of Every Single Investment Made - 11th Jan 18
Police Arrest Tree Protester on Meersbrook Park Road, Sheffield - 10th Jan 18
Stock Market Aggressive Sell Signals - 10th Jan 18
The 2018 Decline in Precious Metals - 10th Jan 18
Gold Hits All-Time Highs Priced In Emerging Market Currencies - 10th Jan 18
TMV : 3X Leveraged Short on US Treasury Bonds - 10th Jan 18
Here are the Key Levels in Gold & Gold Miners - 10th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Stock Market More Correction Likely

Stock-Markets / Stock Markets 2016 Sep 25, 2016 - 10:06 PM GMT

By: Andre_Gratian

Stock-Markets

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, but it has entered a corrective phase.

 Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discuss longer market trends.


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 ajg@cybertrails.com

 More Correction Likely

Market Overview

There is also a fairly reliable short-term cycle which is scheduled to make its low on Tuesday/Wednesday.”

In retrospect, there were probably two short-term cycles bottoming about a week apart which were responsible for the decline from 2193.  This was followed by a period of consolidation until the FED provided the trigger for the next rally, after the second cycle had made its low.  The first phase of the base which was created was reached on Thursday, followed by a correction on Friday which could have ended when it reached the top of a good support level at the close.  However, although the daily indicators are in an uptrend, the hourly indicators are still declining, so we could see a little more on the downside before we turn up again. 

Because of the base structure, it is not clear how much higher we can go, but another five to fifteen points higher than Thursday’s high are possible before more important cycles turn us back down and allow the correction to continue for another few weeks. 

Analysis (This chart and others below, are courtesy of QCharts.com.)

Daily chart

The longer-term trend, as shown by the daily chart, is clearly up, but there is a lot of deceleration taking place suggesting that a larger cycle is topping and causing the price structure to slowly roll over -- possibly all the way into mid-November.  The correction which had begun was interrupted by the bottoming of some short-term cycles which are pushing prices up temporarily. 

Since the high of 2193, the SPX has corrected in a gently sloping red channel which is also clearly visible on the DJIA.  Both found resistance at the top of that channel and were pushed back on Friday, but there could be enough short-term momentum left to take the indexes slightly outside of the channel line before the current rally comes to an end.  This is what base count is suggesting.  Afterwards, the correction which started in mid-August should continue until it makes a final low in the vicinity of the blue parallel which is drawn from the bottom of the Brexit decline. 

Two of the indicators started to resist the downtrend ahead of the FED meeting and moved up sharply after it reported no change in interest rate.  They began to correct with Friday’s decline, but are still in an uptrend and could have one more push up.  The MACD is not looking as bullish.  It made a new low while the others were stabilizing and does not display their kind of upside momentum.  This is a sign that even if it does make a slightly new high, SPX should roll over shortly afterwards. 

Hourly chart

The rally ran into strong resistance at the same time as SPX filled a phase count, and that was enough to create a temporary halt.  The correction will not have retraced .382 of the uptrend from 2120 until it reaches 2156 so, especially with the hourly oscillators still in a downtrend, we may continue to decline on Monday until we reach 2156-2160.  The uptrend is framed by the green trend lines, but there is also a lower black trend line which connects the two lows and it will not be until that one is broken that we can expect the correction to continue. 

On Friday, the opening gap from the day before was almost filled and, since we closed practically on the low of the day, we should fill it completely on Monday before turning up.   The fact that the oscillators are still in a downtrend also suggests that there is a little more to go in the retracement before we start on the next up-wave.  We should find out during the early part of the week if we are ready to go higher (past the red channel line) before rolling over for a deeper correction.

 

  • Some leading & confirming indexes (Daily charts)
  •  
  • Four of the five indices we follow made new highs on this move.  The two major indexes did not, with DJIA beginning to lose ground to SPX.  The mixed picture continues, but we should note that negative divergence is showing in all indicators, so it seems to fit our view that we are in the process of making a top of sorts and that we are not ready to move the SPX to its longer-term projection of 2240 just yet. 
  •  
  •  UUP (dollar ETF)
  •  UUP is neutral, and could go either way.  Last week’s attempt at breaking out of its consolidation channel failed to follow-through. 
  •  
  •  
  • GDX (Gold Miners ETF)
  •  
  • GDX is still in an intermediate correction after topping in August.  It held support just above its former short-term low and rallied along with the market, but has already lost more than half of its gains.  It’s probably only a matter of time before it continues its corrective downtrend.  
  •  
  •  
  • Note: GDX is now updated for subscribers several times throughout the day along with SPX, on Marketurningpoints.com.
  •  
  • USO (U.S. Oil Fund)
  •  Last week was another failed attempt at breaking out of its long-term downtrend.  Looks like more base building is ahead. 

Summary

SPX quickly put a halt to its correction from 2193 and built a base while it waited for the next FOMC meeting.  After the decision was announced, it broke out of its base and met its first phase target which took it back to the top of its corrective channel.  There are higher projections which could (should) be reached before the current rally peaks, and the correction resumes for another month or two.

Andre

FREE TRIAL SUBSCRIPTION

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: info@marketurningpoints.com

 

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

you to visit my website at www.marketurningpoints.com. 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

© 2005-2018 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