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
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Intermediate Topping Process Continues

Stock-Markets / Stock Markets 2019 Nov 04, 2019 - 09:16 AM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX: Long-term trend – There are no clear signs that the bull market is over.

Intermediate trend –  Most likely building an intermediate top.

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


Intermediate Topping Process Continues 

Market Overview

Last week SPX and NDX made a new all-time high.  DJIA failed to do so by a small margin.  NYA (the broadest index) remained well below its January 2018 high.  And, of course, IWM clearly remains in a 14-month downtrend.  It’s obvious that the stock market, as a whole, is a mixed bag.  If it were trying to re-establish it’s long-term uptrend, IWM and NYA would be leading and not lagging.  We should therefore conclude that it must, instead, be forming a top of at least intermediate proportion which will be followed by a correction proportional to the degree of distribution which is currently taking place.

It may be time to consider that the 40-week cycle did make its low right on schedule, on 10/03/19, exactly 40 weeks from its previous low of 12/26/18.  The December low ended a correction of 594 points!  By contrast, the recent cycle low only produced a decline of 172 points and prices have been pushing up ever since.  It is understandable that such a comparatively mild correction should have created some skepticism regarding whether or not the low had been seen.  However, the persistent uptrend since 2856 should be an indication that the 40-week cycle is back in an up-phase.  Until a sudden, sharp decline proves otherwise – in the near future, this should be our current assumption.
 
Based on that premise, how much higher will we go, and how much longer will it take to bring about the final uptick to the current uptrend?  We have two ways to determine this!  Neither can produce an exact answer but only an approximate one.  However, together they suggest that we could already have arrived!  Eric Hadik (Insiidetracktrading.com) is calling for a cluster of cycle tops between November 1-15.  The SPX Point &Figure chart made a congestion pattern low in late August which called for a move to ~3060.  In early October, the index appeared to produce a confirmation pattern leading to the same projection.  On Friday, SPX closed at 3066.72.  Consequently, based on these ballpark projections, we could already have arrived!  (If we keep on going, the next projection would be ~3110).

Needless to say, the next couple of weeks will be watched closely to see if this time/price projection is correct.  Assuming that it is,  what kind of a correction can we expect to see?  The 40-wk cycle  would now be only four weeks along, and if we start a decline, it will put on the brakes preventing a sharp decline from taking place but instead, a gradual one.  This scenario would provide substance to the rounding top theory that I have been suggesting.  If so, we could start slow and, several months down the line, as we approach the low of the correction, accelerate into it. 

Market Analysis (All charts are courtesy of QChart)

SPX daily chart

On Wednesday, the SPX made a short-term high and pulled back on Thursday, found support on a trend line and the 9-dma, and made a new high on Friday.  This keeps the daily uptrend going!  As stated above, the P&F projection taken on a 10-point chart calls for approximately 3060.  In order to reverse its trend, the index would have to close below 3020 -- which is now a strong support level. Therefore, even if we have seen the rally high, it is likely that a congestion pattern would form above 3020 before rolling over. 

There is some divergence on the CCI between the current high and the 3022 high which occurred six weeks ago.  That divergence is more pronounced on the A-D oscillator, at the bottom of the chart.  There is no divergence on the SRSI; it is simply overbought.  This suggests a potential top in the making, but the oscillators will all have to turn down to signal the start of a downtrend. 

What is needed to confirm that a top is in place and that a decline has started is crystal clear, and we must wait until it takes place.  Also, the market action must prove that it is not capable of moving to 3100 before reversing. 

 

SPX hourly chart 

The hourly chart provides an opportunity for closer scrutiny about what the SPX is doing.  On this chart, the daily trend is reduced to a rising channel which has now moved well beyond ifs former high of 3022.  This small channel appears to be built on the lower trend line of the larger, daily channel which is providing support.  To put an end to this trend, we would need to break below 3020 and keep going.  That would not only break that support, but it would also halt and reverse the sequence of short-term higher highs and higher lows which define the current uptrend. 

Friday’s action suggests that we met some resistance at the top line of the small channel since, after the opening surge, the index continued to trade below it; although the push higher at the close, and the lack of clear divergence in the oscillators leaves Monday’s opening in doubt. 

UUP (dollar ETF) daily

If UUP moves a little lower, it will find support on the blue channel line and the dashed red line.  This would almost ensure a rebound, but  failure to go past 27.00 would likely entail a break to a lower level.  The weekly chart suggests that an intermediate correction has started.

 

GDX (Gold miners ETF) weekly

GDX should be able to extend its current rally to about 28.50-29.00 before running into resistance.  If it does not meet with heavy selling at that level, based on the P&F chart formation, the move can extend to as high as 34.00.

 

CCG (canopy growth) daily

CGC found support at the bottom of its red channel.  After an initial bounce, it may be re-testing its low.  If that low holds, the next move could be to the mid-channel dashed red line.

BNO (U.S. Brent oil fund) daily

BNO is rallying with the market.  When the market rolls over, so will BNO.

Summary

In spite of some additional short-term strength to a new all-time high which is primarily driven by strength in the NDX, SPX is most likely putting the final touch on a large intermediate top.

Andre 

FREE TRIAL SUBSCRIPTON

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