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
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 Higher Highs Still Likely

Stock-Markets / Stock Market 2017 Jun 18, 2017 - 06:56 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long-term trend:  Uptrend continues with a serious loss of upside momentum in weekly indicators.

SPX Intermediate trend:  Correction over.  May be heading for about 2500, or fall slightly short of it.

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

 Higher highs still likely

Market Overview

The wave of profit-taking which occurred over the past 10 days was pretty much confined to the  overbought tech sector which, by the end of the past week had pretty much stabilized.  The DJIA essentially ignored the whole thing and went on to make a new all-time high.  SPX, which includes many of the high flyers, underwent a consolidation/correction that appeared to be complete by Friday’s close.  If so, it should now be ready to progress to its next target of about 2455.  This projection was first determined by the congestion pattern established just above 2330, and it should be confirmed if we can resume the uptrend on Monday.

The market action of the past week has done nothing to change my original estimate that an intermediate top is near but still ahead of us.  The Weekly chart continues to be in an uptrend with negative divergence displayed by its indicators.  The same can be said for the daily trend.  A positive opening on Monday morning would most likely trigger a buy signal on the hourly chart and generate another attempt at reaching the projection level mentioned above while, a the same time, extend the life span of the uptrend.

Analysis: (These Charts and subsequent ones courtesy of QCharts.com)

Daily chart

SPX continues to be confined to the second quartile of a large, intermediate (blue) channel which originated at 1810.  The profit-taking of the past few days has created a consolidation pattern that can serve as a platform from which it can propel itself to a new high next week.  This push should be limited to about 2355, complete the minor uptrend which started at 2353, and be followed by another minor corrrection.  While it is possible that this will be the final high, it is more likely that there will be one more high after that. 

There is another factor which has limited the upward reach of the index.  A trend which started at 2084 formed another, less important (greenish) channel which  concluded at 2400, but the correction which folowed was not able to make a significant exit out of that channel and, since April, price has gyrated within a small range around the bottom channel line. 

The action of the index described above will make it very simple to determine when it has made a top.  The next correction which fails to find support at the larger channel’s mid-point (dashed blue line) will confirm that the high was reached and that an important correction has started.  Until this happens, we can assume that the index will continue to crawl upward, within the parameters mentioned above.   

The oscillators at the bottom of the chart are also telling us that the index is still in an uptrend, and will remain so until they have all turned down and become severely negative.  The most likely scenario will be for the 2355 high to be followed by another minor correction.  Only until after the next rally ends (2480-2500?) will the uptrend from 1810 be likely to end. 

Hourly chart

The 2446 projection was met with some expectation that it would be followed by a move to 2453, but this was cut short by the spontaneous selling which took place in the tech sector.  After an a-b-c correction, we are now set to move to that slightly higher target to complete the move which started at 2353 – if we can get past the minor downtrend line and above the former peak at 2334. 

On Friday, there was a little spurt of buying at the close which augurs well for a follow-through on Monday morning.  The A/D oscillator closed on its best level of the day and, along with SRSI, closed positive.  If we can get CCI to follow their lead at Monday’s opening, we should be on our way to about 2455. 

  • An overview of some important indexes (daily charts)
  •  
  • The odds that SPX will make a new high are pretty good, considering that DJIA, NYA (top left and center) and IWM (bottom center) did so last week.  XBD (bottom right) almost did.  Even TRAN (bottom left) made a valiant effort to do the same, but came up short.  There was still too much pressure on the techs for QQQ to participate in the bullishness, and it may be done, along with the FAANGs for what’s left of the uptrend.
  •  
  •  
  • UUP (dollar ETF)
  •  
  • UUP was due for a bounce, but its rally looks limited by nearby overhead resistance, and more basing action should be necessary before it is ready to challenge the top line of its corrective channel. 
  •   
  •  
  • GDX (Gold Miners ETF)
  •  
  • If GDX can remain above 21 for the rest of its correction, it will have built a nice base on its P&F chart from which to launch its July rally.  This is when the next 10-wk cycle should bottom, but there’s a cluster of less important cycles due to make their lows before the end of June which could soften the impact of the weekly cycle.
  •  
  •  
  •  
  • Note: GDX is now updated for subscribers throughout the day, along with SPX.
  •  
  • USO (U.S. Oil Fund)
  •  
  • Is there any hope for USO to get back into a meaningful uptrend?  Perhaps, but I would not hold my breath until it does.   The oil glut continues and the action of oil stocks is saying that it’s not going to end anytime soon!
  •  
  •  
  • Summary
  •  
  • Although SPX was more affected than the Dow (which closed at a new high on Friday) by the tech correction it, too, is expected to continue its uptrend for a while longer.  I believe that the 20-wk cycle, due to bottom in August, will put an end to the rally from 1810 and trigger a multi-month correction.  This probably gives SPX about a month to make its final high between 2480 and 2500 before rolling over.  Nevertheless, let’s keep a close watch on its action after the next target of 2455 is reached is reached.

Andre

For a FREE 4-week trial, send an email to anvi1962@cableone.net, or go to www.marketurningpoints.com and click on "subscribe". There, you will also find subscription options, payment plans, weekly newsletters, and general information. By clicking on "Free Newsletter" you can get a preview of the latest newsletter which is normally posted on Sunday afternoon (unless it happens to be a 3-day weekend, in which case it could be posted on Monday).

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