Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Uptrend Resuming?

Stock-Markets / Stock Markets 2018 Mar 11, 2018 - 06:21 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX: Long-term trend – The bull market is continuing with a top expected in the low 3000s.
 
Intermediate trend – The intermediate correction from 2872 could continue until mid-May, but is mostly behind us.

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 discusses the course of 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 ajg@cybertrails.com

Uptrend Resuming?

 Market Overview

Last week, I wrote the following:

“When the rally from the 2533 low overcame the previous short-term high of 2727, it suggested that the SPX recovery could reach as high as the previous top of 2872, or even a little higher, before reversing.”

(For those of you who might have missed it, last week’s letter is available on “the Market Oracle” under “Authors Archives”.)

So far, the market is cooperating.  On Friday, spurred by a strong jobs report, SPX was up nearly 50 points, closing the week at 2786.  So we appear to be on track for the above forecast; but it could be truncated by some cycles which suggest that a consolidation should take place over the next few weeks.  Minor cycle lows are due next week, and larger ones around mid-April.  And then, the all-important 40-wk cycle is due in mid-May.  So the forecast made above could be altered by some corrective action before we get the all-clear signal for a new high. 

In addition, the rally which started on at 2660, on 3/02, is likely to pause around the former high of 2789 (which is now only three points away) or a little higher; especially since we have either filled or are approaching the maximum projection for this rally phase, and negative divergence has appeared on the hourly chart. 

On the positive side, the daily indicators have returned to a buy signal, so the bulls appear to be in control for the time being and may not be inclined to give back too much ground over the short-term. 

Chart Analysis  (These charts and subsequent ones courtesy of QCharts)

SPX daily chart

We have to admit that this is a pretty bullish-looking chart!  So why should we not expect prices to continue their upside progress right away?  For the reasons that have been stated above in the Market Overview

The secondary low of 2660 (3/02) now appears to be a high-level retest of the initial low of 2533 (2/09).  From a structural standpoint, it also appears to be the start of the next up-phase in the index.  Friday’s strong upside momentum is unlikely to stop on a dime, but carry a little higher into early next week before minor cycles take hold.  So there does not seem to be much in the way of further progress over the near term;  at best, a brief consolidation before we complete the rally phase which started at 2660 -- unless the cycles bottoming (ca.) mid-April have enough pull to cause a deep enough retracement which would prevent the index from making a new high before the pressure from the bottoming 40-wk cycle become dominant.

There is enough uncertainty about what the effects of the cycles bottoming over the next few weeks will be to prevent me from making a longer-term forecast until the larger cycle is out of the way.  We’ll just have to confine ourselves to a short-term analysis of the trend until mid-May. 

At the end of Friday’s session, the daily momentum indicators gave a confirmed buy signal by rising higher instead of dropping back, which had been a possibility with the index still contained below important resistance at the 2730-35 level.  However, the A/D indicator failed to make a new high and to give an all-clear signal.  So we’ll just have to see what happens next week. 

 

SPX hourly chart

Is the market strong, or is it just volatile?  That’s a good question!  It is very noticeable that segments A-B and A’-B’ are remarkably similar.  They both start at about the same price level, find initial resistance at the same level, and then move straight up above that resistance to about the same level.  Both denote a lot of strength (?) with an uninterrupted 85-point rally!  Of course, the similarity may end on Monday if the current move keeps on going.  For all that apparent strength, segment A-B came back down as fast as it went up, with an even larger decline!   So, are we about to experience the same market action?

Probably not!  An EWT analyst would point out that the A-B segment was most likely the 5th wave of a move that started at 2537, while A’-B’ is probably a 3rd wave from the 2647 low.  Maybe!  But what about the cycles that lie ahead, especially the 40-week cycle due only two months away?  It could produce a severe retracement in the market and mess up whatever pattern we assign to the current market action.  This is why I suggest that we confine ourselves to only trying to define the short term until it is out of the way.  Longer term, it’s fairly certain that we have not seen the top of the bull market, so we could reasonably expect a new high to be made after the 40-wk cycle has bottomed and propels prices back up after it reverses.

Over the near-term it’s also very likely that whether we go up only three more points on Monday, or 14 more, the current move is now on a short leash.  This is made fairly obvious by the negative divergence showing in the CCI along with a far less than super bullish performance in the A/Ds to support a 50-point move!  The NASDAQ 100 components that are included in SPX are responsible for the volatility of the index -- not the NYSE components. 

 

TRAN, IWM, SPX (daily charts)

The purpose of this section is not to analyze each index in great detail, but simply to compare the performance of the first two to the SPX’s to see if they support its current performance, or suggest that the latter is making an important top.  I think that last week’s action in IWM says it all for now, and we don’t have to elaborate; although we may want to keep an eye on TRAN which was forced to reluctantly joined the party on Friday.

UUP (dollar ETF)

UUP has pulled back to the support of the (green) 30-DMA and bounced.  A break of that support would at least re-test the former lows and be a factor in causing GDX to start a rally. 

GDX (Gold miners ETF)

Recently, the action of GDX has been closely tied to that of UUP, and GDX is closely watching for UUP to resume its downtrend.  This could come any day, even though the GDX 13-wk cycle low is still (ideally) a few days away.  Perhaps a start now, with acceleration a little later?

USO (United States Oil Fund)

USO is still correcting and may not be quite finished.  Even if it is not, no major correction is expected at this time.

Summary

SPX could end Friday’s strong rally on Monday and start a minor correction.  Cycles are, essentially, negatively biased until the middle of May, so the current structure is a little uncertain -- but will define itself over the next few days and weeks. 

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

© 2005-2019 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