Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Dow Stock Market Trend Forecast Update

Stock-Markets / Stock Markets 2019 Sep 21, 2019 - 10:00 AM GMT

By: Nadeem_Walayat

Stock-Markets

This is the 2nd of my 2 part latest update to my stock market trend forecast for 2019 (Part1). Also note that the whole of this analysis was first made available to Patrons who support my work Stock Market Trend Forecasts When Mega-Trends Collide).


Clearly August has seen a significant deviation from the trend, trading down 25,300 which is significantly lower than the 26,500 I thought would hold any decline into August. The Dow currently stands at -4.5% against the forecast trend. This analysis will update on whether its possible for the Dow to converge to the trend forecast (red line) towards a late September high of Dow 28k which with 3 weeks to go is definitely a tough ask. 

Technical Analysis

Trend Analysis

  • The Dow continues put in a series of higher lows and highs, however the pace of advance has slowed with the most recent correction about 1000 points deeper than it should have been which suggests that the market is gearing up for a stronger down move later in the year (October).
  • Support is at 25,500, 24,750, 24,000. Which suggests a failure for the trend to resume could likely see the Dow trade below 24,000.
  • Resistance is at 26,400, 26,750, 27000 and the last high of 27,360.
  • Trendline support is at 25,700, rising to 26,600 by the end of September. So the Dow has some room to correct down to 26,200 if it chose to without altering an overall bullish picture.

Elliott Wave

My last analysis Elliott wave proved accurate so remains unchanged, i.e. we have had a Wave 4 correction which should set us up for a fifth wave advance to a new all time high by late Sept / Early October.

MACD - Gave a bearish signal when it broke below the up trendline, suggests that the stock market is weakening, though marginally oversold in immediate terms. Which suggests the Dow should trade higher during September but fail to reach its all time high.

SEASONAL ANALYSIS

August was supposed to be a positive month whilst September is expected to be a weak month. However we clearly have some sort of inversion going on here, which suggests that as August was weak than September should be stronger than seasonal expectations.

Therefore in seasonal terms my 'adjusted' expectations are for a strong September, Weak October, Strong November and December. As for how strong and weak, I'll determine in my next analysis due late September.

US Interest Rates

As expected the US cut interest rates by 0.25%. which is confirmation that the Fed will do whatever is necessary to avoid a recession in 2020. Which translates into blowing asset prices bubbles, that should be bullish for US housing and stocks.

Conclusion

Inverted yield curve, recession warnings, trade wars, climate change, all that and the Dow's only down 4% from it's all time high?

The Dow peaked at 27,359, last close at 26,403. So the Dow is LESS than 4% from it's ALL TIME HIGH! A fact that the perma fear peddling mainstream press and most commentators don't or can't seem to grasp, especially the perma bear variety who see a bear market in EVERY correction. Okay, yes we have had a correction, and it was a couple of % and couple of weeks longer than I thought it would be, but 4% is NOTHING! In fact if the market was to give me an unexpected correction, then I would have preferred something more like 8%, at least then I could do something with it i.e. buy more AI stocks at a discount, 4% is nothing! Folks, not worth worrying about.

So what's likely to happen next ?

This analysis suggests the Dow should have another run higher at it's all time high during September, i.e. target a break of 27,360 before it can reach 28,000 by perhaps early October. However, more probable now is that the Dow is unable to break above 27,360 and turns lower for October with a double top pattern of sorts.

So in conclusion, in terms of the bull market, nothing much has changed, were still trending towards 28,000, even if we fails to get there this time i.e. by the end of September ahead of a weak October. Likewise expectations for later in the year remain largely intact i.e. a santa rally towards Dow 30k. The prospects for which I will seek to update towards the end of September.

Peering into the Mists of Time

Don't forget we are in a bull market and what bull markets do is to trade at new all time highs. The Dow last traded AT a new all time high on 16th July. As long as the Dow continues to follow this pattern of corrections followed by trends to new all time highs then there is nothing to worry about. Sure we will get wild rides at times of as much as 20%! But 4% is literally nothing! Until that pattern for new highs fails just buy the target stocks when the opportunity presents itself and let the perma crowd worry about bear markets always being just around the corner as this stocks bull market driven by multiple mega-trends continues to climb ever higher, 2019. 2020, 2021....

The whole of this analysis was first made available to Patrons who support my work: Stock Market Trend Forecasts When Mega-Trends Collide.

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Scheduled Analysis

  • UK Housing market series
  • Stock Market Trend Forecast Sept to Dec
  • Machine Intelligence Investing stocks sub sector analysis
  • US Dollar Index
  • NASDAQ
  • EuroDollar Futures
  • EUR/RUB

Recent Analysis includes:

Your analyst a consistent stock market bull since Dow 7000. (15 Mar 2009 - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470).

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2019 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat 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