Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

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

6 Critical Money Making Rules