Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

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

Stock Market Correction Approaching Initial Objective

Stock-Markets / Stock Markets 2020 Sep 22, 2020 - 05:51 PM GMT

By: Andre_Gratian


Current Position of the Market

SPX Long-term trend:  For now, the best guesstimate is that we are still in the bull market which started in 2009. Where we go from here and how far will be gauged after the September-October correction.

SPX Intermediate trend:  Potential intermediate correction in progress.

Analysis of the short-term trend is done daily 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

Approaching Initial Objective 

P&F:  Short-term projection: 3300-3260 - Objective reached on 9/18 with SPX 3292 intra-day low.

Cycles:  Looking ahead!  90-yr cycle – last low: 1932. Next low: 2022

7-yr cycle – last low: 2016.  Next low: 2023

20-td – 9/17 - bottomed on 9/18

Nest of short-term cycle lows on about 10/15-20

Market Analysis (Charts courtesy of QCharts

SPX-TRAN-IWM daily charts: 

Both TRAN and IWM showed relative strength to SPX last week, suggesting that we should start to rally.  This would make sense since a short-term cycle apparently bottomed right on time, on Friday.  The relative strength of TRAN to SPX is far more positive than IWM’s.  I am not sure if this has implications for the longer term.  I have not followed this aspect of their relative strength long enough to come to a firm conclusion.  I assume the days ahead will make this clearer.

SPX daily chart 

Since the decline from the 2588 high, the daily trend has shifted from the blue channel to the green channel.  The green channel is divided into sections which are anchored at various previous lows.  The first parallel which coincided with the 50-dma did not hold and was breached by the bottoming of the 20-td cycle which made its low on Friday at the suggested short-term P&F target, and this allowed for the next parallel close below to hold and provide a rally which could climb back above the 50-dma and repair some of the damage -- temporarily.  With the nest of cycles due in mid-October, it is likely that after the upward phase of the 20-td has exhausted itself, the decline will continue. 

It is too soon to establish another P&F projection but we can get a sense of where the next low might occur by considering a potential .382 retracement of the uptrend from March.  This is reinforced by the fact that this retracement is just below the 200-dma which tends to provide support. 

Last week’s decline has sent the momentum oscillators (CCI,SRSI) back to their lows, and the A-D oscillator from a slight positive back into negative.  However, the latter has developed some good positive divergence which strengthens the potential for a countertrend rally in conjuntion with the minor cycle reversal. 

SPX hourly chart

There were two short-term cycle lows a week apart which conspired to reverse the primary trend from the March low and created a sharp profit-taking spree.  After the first one had made its low, it caused a sharp rebound, but the second cycle also had to have its say.  At first, it looked as if it would bottom at a slightly higher level but, although it tried to hold at 3330, it could not and dropped to just below 3300 on Friday.  The 35-point bounce from the low which stopped at its 9-hr MA just before the close was preceded by some good positive divergence at the hourly level – a common occurrence.

 It would not take much to push the index back into a short-term uptrend.  A positive opening on Monday morning with any kind of follow-through would most likely produce a short-term buy signal in the momentum oscillators.  The SRSI stopped just short of a giving one, but it will require both becoming positive to give a confirmation. 

A short-term rally back to the top of the channel would take the index close to the 3450 level, and that may be all that we can expect for now.  In about a week, we could be making a secondary top which would result in an extension of the decline into mid-October.

  • UUP (dollar ETF) ($USD chart not available from this data provider)
  • UUP has been holding above its recent low, perhaps building a base to move higher.  However, the 50-MA looks just ahead, and it will have to be exceeded before further appreciation can take place. 
  • GDX (gold miners)
  • GDX pushed slightly higher and pulled back.  It has continued to find support on the 50-MA but each time, it could only muster a weak bounce instead of finding aggressive buyers.  Although the indicators have not yet given a sell signal, if this action continues it will result in additional consolidation -- perhaps back down to about the 38.00 level where there is good support.
  • PAAS (Pan American Silver Corp)
  • PAAS is in the same fix as GDX and it could pull back to about 30.00 before finding good support.
  • BNO (U.S. Brent Oil fund)
  • BNO bounced but must get back above the 50-MA to resume its uptrend to the 200-MA (13.02).
  • Summary

SPX has reacted to two minor cycles making their lows a week apart and has most likely ended its initial correction phase.  After a rebound which could take it back to the top of the current consolidation channel near the 3450 level, it should be ready for another, possibly more severe phase of the correction.



For a FREE 4-week trial, send an email to, or go to 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 - 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