Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Debt-Driven Consumer Economy Breaking Down - 23rd Oct 17
Next Wall Street Stock Market Crash Looms? Lessons On Anniversary Of 1987 Crash - 23rd Oct 17
This Super Metal Is Set To Soar By 300% - 23rd Oct 17
More New Record Highs As S&P 500 Gets Closer To 2,600 Mark - 23rd Oct 17
Another Minor Stock Market Top? - 23rd Oct 17
Bitcoin Hits $6,000, $100 Billion Market Cap As Helicopter Ben and Jamie Demon Warn The End Is Near! - 22nd Oct 17
Time for Caution in Gold Miners - 22nd Oct 17
“Great Rotation” Ahead; Will it Be Inflationary or Deflationary? - 21st Oct 17
The Trigger for Volatility, Rates and the Next Crisis - 21st Oct 17
Perks to Consider an Agent for Auto Insurance - 21st Oct 17
Emerging Megatrends Hurting Consumers - 21st Oct 17
A Catalyst of the Stock Market Bubble Bust - 21st Oct 17
Silver Stocks Comatose - 21st Oct 17
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

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

SPX 2500 … At Last!

Stock-Markets / Stock Market 2017 Sep 18, 2017 - 12:45 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long-term trend:  The uptrend has pushed a little higher, near-term.

SPX Intermediate trend:  By rising past 2491 the start of the (inevitable) intermediate correction has been delayed. .

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

 

  • SPX 2500 … At Last! 

Market overview: 

The (approximately) 2500 projection for the SPX was made a long time ago, but when we made the 2491 top, which was followed by the 40-wk cycle-induced decline to 2426, achieving it at some time in the near future did not look very promising.  And yet, here we are, a month later! 

So now that we have reached 2500, what’s next?  There  is something magical about P&F and Fibonacci projections that we do not comprehend but cannot ignore, when we analyze the stock market.  But it does not mean that they will be one hundred percent reliable and accepted without question.  There is no such thing in the stock market!  Right now, there is also some disagreement between the 10X and 1X P&F charts that must be resolved

The final price is probably not going to be exactly 2500, probably more like 2503-04, and since this areais being targeted by the count from various levels, it stands a pretty good chance of being correct, but we need to wait for a reversal to occur to be certain that this is what the market intends. 

In the meantime, we still need to label all trends, from weekly to 60m, as up.

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

  • Daily chart 
  •  
  • I use channels as an important source of support and resistance points for the market.  The price action which started at 2322 has worked its way up in three different channels.  They are identified on the chart by black, purple, and green trend lines.  The green channel was busted by the decline of the 40-wk cycle.  The bottom line of the purple channel was formed when the low of that cycle was made by connecting it to the 5/18 low, and SPX is now finding resistance at a secondary top channel line drawn as a parallel to the higher one from the 4/26 minor top.  Since that resistance coincides with the 2500 projection, we may expect it to cause a reversal in that vicinity (to be confirmed, of course – always!).  However, should that level be exceeded substantially, we will have to revise our projection for a top, just as we had to revise the wave count when the index exceeded 2491. 
  •  
  • The breaking of the  green lower channel line was sudden, due to the 40-wk cycle waiting until the last minute to decline into its low.  We do not have that condition here and, besides, we will have another channel line to break before getting to the purple one.  It is the bottom line of the minor channel that formed from the 40-wk cycle low, and it could provide temporary support – especially since its level coincides with that of the former minor top.  So, the decline should be more gradual until we challenge the bottom of the purple channel where more temporary support can be found.  And then, if we presume that, after reaching 2500 we have started to decline into October/November, we will also have to break out of the black channel.  In other words, the decline from 2500 should be far more laborious than the one from 2491 -- at least at its start.
  •  
  • The oscillators appear to validate this view of the decline.  The momentum oscillators are just beginning to show negative divergence and are still very high, so it may be slow going until they get closer to the zero line.   
  •  
  •  
  • Hourly chart
  •  
  • I have drawn trend lines for a number of channels here also, but we will concern ourselves with only one of them: the small greenish channel which outlines the last five waves of the rally (from 2447) with a fifth wave currently under formation.  For the last 8 hours, the index has not shown very much upside momentum -- simply crawling along the bottom line of the channel, and not pushing away vigorously.  The entire deceleration process is four days old.  Granted, this could be consolidation for another good push higher, and since that possibility cannot be excluded at this time, this is the reason why we need to see if the projection will be observed and if we get a reversal at this level.
  •  
  • If (when) it does come, the first support level is at 2480, so that should be a logical point for the first selling wave to take a breather.  After that, we might go down to close the gap.  But we are getting ahead of ourselves.  Let’s see if we get a reversal, first!
  •  
  • The hourly oscillators are not nearly as bullish as the daily, but that would change if we can develop some good upward momentum from here, so let’s wait and see what takes place over the next couple of days.
  •  
  •  
  • An overview of some important indexes (daily charts)
  •  
  • The rally has helped the near-term disparity in the charts.  Near-term, they are now all pointing up again with each one in the top tier making new highs, last week; seemingly still able to pull up the rear, although  none in the lower tier did so, including QQQ (bottom right) for the first time.  XBD (bottom left) has now become the weakest of the eight indexes, and this could be a warning, especially if QQQ joins it in resisting any further uptrend.   Each one in the bottom tier has been, historically, a market leader par excellence.
  •  
  • UUP (dollar ETF)
  •  
  • ETF had a small bounce in a downtrend.  Nothing significant pointing to a reversal, so far.
  •  
  • GDX (Gold Miners ETF)
  •  
  • GDX broke out of a triangle formation and ran up to its highest point before giving a short-term sell signal.  This has provided a potential intermediate buy signal, but it has not yet been able to reverse its short-term downtrend, and may require a few more days and slightly lower prices to do so.  It has good support above 23.50 which should curtail the decline.  It is also in the time-frame of its 18/20-wk cycle which is by nature irregular and approaching a record in length. But the indicators are not yet positioned for a reversal and it may take a few more days for them to be ready.
  •  
  •  
  • Note: GDX is now updated for subscribers throughout the day, along with SPX.  Both, with their derivatives, are good trading vehicles, and you will receive detailed information on both.
  •  
  • USO (United States Oil Fund)
  •  
  • USO has finally managed to exceed its top channel line, but that does not mean that it is ready for an extended uptrend.  It still faces resistance from the 233-MA just above, as well as from trend lines that can curtail its advance. 
  •  
  • Summary

Now that the Irma-induced delay of the rally is behind us, SPX was allowed to reach its long-standing 2500 target.  But will it stop there and reverse to start its descent into October/November, or will it move higher, first?  There is some disagreement in what the exact P&F projection should be and we will have to wait until the market itself tells us exactly at what price level it wants to reverse.

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

© 2005-2017 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