Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17
Is Inflation an issue or did the Fed Mess Up? - 8th Aug 17
Top 3 Technical Trading Tools Part 1: Japanese Candlesticks - 8th Aug 17
Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - 8th Aug 17
What Happened to Thousands of Sheffield's Street Trees 2017 - Fellings Documentary - 8th Aug 17
Solar, Bubble, Banks, War, and Legal Tender: Five Reasons Why You Should Buy Silver Now - 7th Aug 17
CRASH - If Some People Do It, Nothing Bad Happens, But If Everyone Does It, All Hell Breaks Loose - 7th Aug 17
Gold and Silver : The Battle for Control - 7th Aug 17
Precious Metals Sector is on Major Buy Signal - 7th Aug 17
Stock Market - Has Time Run Out? - 7th Aug 17
Get Ready for an Historic Upside Gold and Silver Run - 7th Aug 17
BOOM! Bitcoin Rockets To New All-Time High As Cryptocurrencies Surge Higher! - 7th Aug 17
U.S. Dollar: This Crash Signals the End - 6th Aug 17
Predicting The Price Of Gold Is A Fool’s Game - 6th Aug 17
Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - 6th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Stock Market Correction Continues

Stock-Markets / Stock Market 2017 Mar 20, 2017 - 05:10 AM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long-term trend: Uptrend continues.

SPX Intermediate trend: The correction from 2400 continues,

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 anvi1962@cableone.net.

Correction Continues

Market Overview

SPX has been correcting ever since it reached its 2400 target on February 30. The correction has been mild, declining about 46 points in its first phase. The second phase was a rally which reached 2390 last week, falling short of a potential target extension to 2410. Now, the index appears to have started on its next phase which should be another decline induced by intermediate cycles bottoming over the next six weeks. A projection based on the amount of distribution generated since the high does not foresee a major -- but still healthy -- decline at this time, which could continue for several more weeks until all three cycles have made their lows. More precise information will be made available to subscribers in the form of daily updates, as the formation unfolds.

After the correction is complete, another rally should reach a new high which will be determined by the re-accumulation pattern created by the current correction. A significant decline of an estimated 300+ points will most likely wait until the next high before getting underway.

Daily chart

The rally from 2084 has been progressing in the secondary (brown) channel which is actually the tertiary channel if you consider the primary pit bull market channel (not shown on this chart). The trend line drawn from that low stopped the first part of the correction, and it needs to be broken to confirm that it is now extending into the cycle lows which could come in late April-early May.

Structure suggests that SPX should trade outside of the bottom (dashed) trend line of the secondary channel before the correction is complete, and (coincidentally) find support on the extensive congestion area which took place over a two-month period above 2100. However, with three important cycles bottoming in close proximity over the next few weeks, we could experience some volatility before we are ready to resume the long-term uptrend.

The indicators look mixed, all going in different directions, but two of the three have already peaked suggesting that we are about to break the trend line from 2084. For confirmation, the top indicator must break its trend line and go negative.

Advance warning that the daily indicators are ready to give a sell signal usually comes from the hourly indicators which are the early birds. As we will see next, they issued a fairly decisive call on Friday.

Hourly chart

After the rally following the Fed’s decision to raise rates, the index went into a minor consolidation phase which turned down on Friday after a failed attempt at moving higher. The last two hours of trading on Friday took the index back to the lowest level of the day where it closed, seemingly ready to break below the small congestion area which has enough distribution to decline well outside of the trend line and even below the gap. If this occurs, it would create a confirmed sell signal that should also break below the 2353 level which has previously supported prices.

This is the implication given by the closing action of the oscillators on Friday, and which often results in a downside gap opening on the next day of trading. Should this happen, a good decline on Monday would result in a sell signal in the daily indicators. As always, the market action will need to confirm the analysis.

An overview of some important indexes (Weekly charts)

TRAN and IWM (bottom left and center) continue to be the weakest of the group with TRAN now clearly the weaker (which is as it should be) and nearly ready to give a weekly sell signal. As you can see, the strong ones are overbought according to their MF and RSI and showing negative divergence on at least one of the oscillators. But it’s the transportation index which could be the first to go negative next week.

UUP (dollar ETF)

UUP had a quick drop last week as it continues the c-wave correction from its 7-yr high. It found temporary support on the corrective mid-channel line, but is likely to drop lower before its correction is complete.

GDX (Gold Miners ETF)

With the help of a daily and two weekly cycles bottoming close to one another, GDX rallied in what could still be an incomplete correction from its secondary top. In which case, it could still make slightly new lows, but not before completing its current rally which requires one more high. The current pattern does not have much of a base and some backing and filling is needed.

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

USO (U.S. Oil Fund)

USO is holding on its main trend line, even though it was breached. If it fails, it can still rely on the lower up-channel line for support. Beyond that, the bottom of the larger corrective channel could be the target. USO must be given a little time to decide which path it next wants to follow.

Summary:

SPX started a correction after it reached the 2400 target. Until now, it was not certain if it wanted to continue to the 2410 extension before correcting. Friday’s action strongly implies that it is preparing to continue the corrective process which could last for several more weeks until the three intermediate cycles that are currently bottoming have made their lows. More specific information will be provided through multiple daily updates, including price projections and reversal points, as the correction evolves.

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

© 2005-2017 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

Catching a Falling Financial Knife