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
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19
Boris Johnson's "Do or Die, Dead in a Ditch" Brexit Strategy - 11th Sep 19
Precious Metals, US Dollar: How It All Relates – Part I - 11th Sep 19
Bank of England’s Carney Delivers Dollar Shocker at Jackson Hole meeting - 11th Sep 19
Gold and Silver Wounded Animals, Indeed - 11th Sep 19
Boris Johnson a Crippled Prime Minister - 11th Sep 19
Gold Significant Correction Has Started - 11th Sep 19
Reasons To Follow Experienced Traders In Automated Trading - 11th Sep 19
Silver's Sharp Reaction Back - 11th Sep 19
2020 Will Be the Most Volatile Market Year in History - 11th Sep 19
Westminister BrExit Extreme Chaos Puts Britain into a Pre-Civil War State - 10th Sep 19
Gold to Correct as Stocks Rally - 10th Sep 19
Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - 10th Sep 19
Stock Market Sector Rotation Giving Mixed Signals About The Future - 10th Sep 19
The Online Gaming Industry is Going Up - 10th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

SPX Stock Market Downtrend Continues

Stock-Markets / Stock Markets 2016 Nov 06, 2016 - 06:31 PM GMT

By: Tony_Caldaro

Stock-Markets

The week started at SPX 2126. After a bounce to SPX 2133 on Monday the market steadily declined to 2084 by Friday. There were three 10+ point rallies along the way, but they were all sold the same, or following, day. For the week the SPX/DOW lost 1.7%, and the NDX/NAZ lost 2.9%. On the economic front positive reports outpaced negative ones. On the downtick: Chicago PMI, auto sales, construction spending, the ADP, the WLEI and weekly jobless claims increased. On the uptick: personal income/spending, the PCE, ISM services, factory orders, monthly payrolls, the Q4 GDP estimate, plus the trade balance and unemployment rate improved. Next week will be highlighted by the Election.


LONG TERM: uptrend

This market has been quite a challenge since the beginning of 2016. A gap down opening on the first trading day of the year took the market from SPX 2044-1812 by mid-January. Then after a 135 point rally the market retested that low at SPX 1810 by mid-February. After that the market rallied to all time new highs by July, after pausing for a two day Br-exit drop in late-June. Now after making an all time high in August at SPX 2194, the market has been effectively declining for three months, hitting it lowest level on Friday at 2084. After all these gyrations the market is barely up 2% on the year.

The action over the past two years has been more like a demand/supply driven commodity than an equity market. A grind up to all time highs by May 2015. Then a quick nearly 300 point decline, followed by another 300 point decline, with a rally in between to within 1% of all time highs. Then just when it looked like a bear market was underway, the market stormed to all time highs. It has been quite a roller coaster ride for investors. And a dream come true for day traders, who thrive on volatility.

There are lots of opinions as to where this market is in it overall long term trend. Just ask any two people and you will likely get two different opinions. Our opinion, however, remains unchanged. We are counting the February low as the end of the May 2015 to February 2016 bear market. While the market only dropped 17%. We found five previous instances, out of the last twenty-five bear markets, ending with less than a 20% decline. Until SPX 1992 is broken to the downside we see no reason to change this opinion.

MEDIUM TERM: downtrend

From the February SPX 1810 low we now see quite an odd configuration of waves. Not seen since the early stages of the 1984-1987 bull market. We now have a five wave uptrend to SPX 2111, followed by a three trend decline to SPX 1992. Then we have another five wave uptrend to SPX 2194, and again followed by a three trend decline. With the last of these three trends still underway.

The labeling on the daily chart displays an Intermediate wave i, followed by three Minor waves for Intermediate wave ii. Then a Minor wave 1, followed by three Minute waves for Minor wave 2. Currently this entire Minor 2 correction has retraced a bit more than 50%, but less than 61.8%, of Minor wave 1. The 61.8% relationship is at the OEW 2070 pivot. At the close on Friday the daily/weekly RSI are now at oversold levels usually reached near, or at the end, of downtrends. Check out the weekly RSI in the weekly chart. The weekly MACD, while pointing down, is not a concern until it drops below zero. As you can observe, downtrends can become quite nasty when that occurs. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2116 and 2131 pivots.

SHORT TERM

Since this three trend decline began in August at SPX 2194, it has been a series of small overlapping waves. Nothing that has looked impulsive at all, suggesting it is only a correction. During the three wave Intermediate ii correction, the first decline did a 23.6% retracement and then second completed a 38.2% retracement of Intermediate i. During this three wave Minor 2 correction, the first decline did a 38.2% retracement and the second decline is currently within the 50% to 61.8% retracement range of Minor 1.

Should the OEW 2085 pivot range hold for a couple of days we could consider the downtrend over. If not, there are still two-three trading days to deal with the election, then the 2070 pivot is likely to hold. After those two pivots there is little support until the 2043 and 2019 pivots. Should those pivots get approached this alternate count may start coming back into play.

Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2100 and the 2116 pivots. Short term momentum ended the week oversold. Trade what’s in front of you!

FOREIGN MARKETS

Asian market were mostly lower losing 1.6%.

European markets were all lower losing 4.1%.

The Commodity equity group were all lower losing 2.8%.

The DJ World index lost 2.0%.

COMMODITIES

Bonds continue to downtrend but gained 0.6%.

Crude remains in a downtrend and lost 9.5% on the week.

Gold is trying to uptrend and gained 2.2%.

The USD remains in an uptrend but lost 1.3% on the week.

NEXT WEEK

Monday: consumer credit at 3pm. Tuesday: the Election. Wednesday: wholesale inventories. Thursday: weekly jobless claims and the budget deficit. Friday: consumer sentiment.

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