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
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
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

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Stock Market Only Minor Top Ahead

Stock-Markets / Stock Market 2017 Oct 16, 2017 - 12:48 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long term trend:  Continues to make new highs with no sign of a major top in sight.

SPX Intermediate trend:  A re-accumulation phase at the 2500 level has produced higher counts which should provide higher prices before a reversal takes place.

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

 

  • Only Minor Top Ahead

Market overview:    

We are approaching the full count from the 2500 re-accumulation level, but it is likely that we will get there through a series of fits and starts and not directly.  This will be dictated by the very nature of the market itself that requires that projection targets be reached in a structured manner which is the essence of price progression.  Cycles also play a complementary role and, except for a minor cycle which is on the verge of bottoming, there are none capable of moving the market appreciably to the downside and ready to make their lows imminently ahead.  In fact, the soonest we can expect an important correction to start is probably still at least a couple of weeks away.  In the meantime, higher prices are likely.

The steady move upward without any significant pull-back has frustrated the bears, but under the current market conditions, there is little to be done for them to grit their teeth and learn patience.  The simplest way to assess what’s ahead is to look at a weekly and a daily chart.  The weekly indicators are at their highest levels since last October, surpassing in height everything in-between.  This is proof that the market is not nearly ready to have an important correction.  Negative divergence will have to show before this happens, as it did in June 2015 and August 2016.  Even the daily oscillators will need to complete a topping formation before becoming negative.  They may just be starting to do this; and future  trend lines will have to show deceleration by connecting lows at less steep angles.  All this must happen before we can expect a good correction to take place. 

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

  • Daily chart    
  •  
  • Some deceleration is appearing in the intermediate-term trend, as shown by the inability of the index to rise to the top of the blue channel, but none is evident in the short-term trend since price has risen all the way to the top of a secondary (green) channel where it is beginning to flatten out as it encounters resistance.  That, and the fact that all the oscillators are showing negative divergence is an indication that a reversal is about to take place, but I would not bet on its being anything other than one of a minor nature.  There is too much upside momentum and the divergence is only the result of traders not willing to step in at the very top!  This privilege is reserved for those who have little market experience.  But neither will experienced traders be waiting very long before buying back in.  They are very much aware that  little distribution has formed and therefore the anticipated pull-back cannot be all that great.  Nor, as suggested in the Overview, are there any important cycles making their lows in the immediate future -- not until January.  So, there is still time for the incomplete structure to complete and for distribution to form.  The current level of distribution is not enough to bring about anything more than a couple dozen points on the downside, if we come down right away.  There are, however, higher counts available from the 2500 level; and if you go with the odds, you should be looking for higher prices before too much happens on the downside. 
  •  
  • Remember what I said earlier about the weekly oscillators still being in an uptrend and having to be muted before we can expect much of a reversal.  Here, you can see the daily oscillators are showing divergence, but the CCI is still very high and will have to gradually drop closer to the zero line before it can be expected to go through and give a sell signal.
  •  
  •  
  • Hourly chart
  •  
  • From SPX 2417 on 08/17, it has been pretty much a straight up move with only minor consolidations along the way.  More of the same is expected as the index begins to roll over in preparation for making a rally high.  But it won’t be right away.  The strength in the higher degree time frame suggest that some deceleration will have to occur, first. 
  •  
  • If I am correct that no important cycle is likely to bottom until January, we could push this uptrend into late November before a reversal takes place.  This is just a guess.  We’ll firm up the date when the market give us the advance warning that it is about to roll over. 
  •  
  • There is a minor cycle due (ideally) early next week which could bring about a little pull-back before we move higher.  On the other hand, the current phase target lies a few points higher and the index may decide to reach it first, on Monday.  The oscillators, which are already declining, place the odds on the former, especially since we appear to be making a small terminal pattern.  But I still would not take it for granted and would let the market speak for itself.
  •  
  •  
  • An overview of some important indexes (daily charts)
  •  
  • The indexes which stand out this week (in a minor way), are the IWM (lower, left), followed closely by XBD (third on the bottom).  They offer the most contrast to SPX in that they have obviously been under distribution for the past two weeks, whereby others have forged ahead more forcefully.   I admit that I am making a mountain out of a mole hill, but it could be an indication that the market is entering a topping zone which will become more manifest over the next couple of weeks.  This does not preclude in any way that we are still in a very strong bull market which shows no sign of being close to ending.
  •  
  •  
  • UUP (dollar ETF)
  •  
  • After essentially reaching its 23.50 P&F projection (23.66 low), UUP is consolidating its recent oversold bounce, and could be getting ready to extend it.  Moving through the 24.50 resistance would be a positive accomplishment.
  •  
  • GDX (Gold Miners ETF)
  •  
  • GDX is at a critical level.  At 23.84, it has now retraced .382 of its previous correction from the 25.58 top.  It’s attempt to move higher, which is better seen on an hourly chart, was rejected on Friday.  One of the reasons for this is that it has a 25-day cycle bottoming next week, which could restrain it further.  The key to revealing its current position will be what it does after that cycle has made its low.  If it can continue its current uptrend past 24.20, it will begin to take on a bullish tint.  However, if it cannot continue its upside momentum aggressively past that level, it will be at risk of pulling back sharply into the year-end cycle lows.
  •  
  • USO (United States Oil Fund)
  •  
  • USO has another opportunity to show that overcoming the secondary channel was not a fluke.  If it can rise above the next purple downtrend line, it will have a chance to pit itself against the real resistance line which presently lies around 11.25, and which is reinforced by the overhead supply at the former top.  Until USO meets that challenge successfully, it will probably continue to stagnate in a wide base formation.
  •  
  • Summary
  •  
  • There is some technical evidence that SPX is coming into a minor top (which may already have arrived), in order to comply with the bottoming of the 6-wk cycle next week -- unless it first decides to push higher to fill its ca. 2565 projection. 
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