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
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

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

Stock Market Correction Continues

Stock-Markets / Stock Markets 2020 Nov 02, 2020 - 11:56 AM GMT

By: Andre_Gratian

Stock-Markets

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-November correction.

SPX Intermediate trend:  Intermediate correction could continue as a large sideways pattern at least into mid-November, and perhaps until the end of the year.

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 2-week trial period of daily comments, please let me know at anvi1962@cableone.net

Correction Continues

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

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

New minor low about mid-November.

Market Analysis (Charts courtesy of QCharts

SPX-IWM weekly charts

IWM (RUT EFF) is a proven leading indicator.  When its relative strength is compared to SPX on an intermediate and long-term basis, it has a flawless track record, having forecasted major tops in 2000 and 2007, and more recently the 9/18 and 2/20 intermediate tops.  It stands to reason that we should continue to follow its relative  performance to SPX if we want to be warned about the next important market top, especially since it will very likely mark the end of the 2009 bull market. 

For now, and in spite of the recent market weakness, the bulls do not have to worry.  IWM is outperforming SPX over the short-term, telling us that the index is only undergoing a short-term correction which will resolve itself to the upside when it is complete – ostensibly by mid-November according to short-term cycles. 

SPX daily chart

After some hesitation at the 3420 level, SPX opted to continue a decline which started from the 3550 level and arrived at 3234 on Friday, where it found support and bounced back to 3270 by the close.  I had foreseen a near-term target for Friday’s move to 3230, but the index failed to reach it by a fraction.

Although Friday’s action, which ended with a good bounce at the end of the day suggests that a low has been struck, it is likely to be only a near-term bounce which could extend to 3320 if the short-term base which was created at the low is not extended on Monday.  In any case, this should only be a minor rally which, after it is completed, should see SPX drop down to 3200-3180 and possibly lower on its next short-term down-phase.

I had expected to retrace back down to about 3050 (.382 retracement) before the end of this correction, but the P&F path to that level could be a bit of a stretch and it would have to take place by mid-November since this is when the next cycle low is due. 

The indicators (oscillators-MAs) are not ready to signal a correction low, and you can see by the red channel on the chart, we would have to get out of it before the end of the correction is confirmed.   After next week’s market action, we should have a much better insight into the market’s position.

  •  
  • SPX hourly chart
  •  
  • From the break of 3450, we could see that some deceleration was taking place into Friday since the index price was having more and more difficulty reaching the bottom of the secondary channel line.  This is reflected in the positive divergence showing in the oscillators as they pulled away from their lows with the A-Ds registering the greatest returning strength.  At the end of the session, enough buying appeared to drive prices higher into the close. 
  •  
  • This action suggests that Friday’s bounce should continue into Monday with the most likely target being the heavy overhead, downward-slanting red line which, combined with the price zone between 3330 and 3360 should offer enough resistance to stop the uptick -- at least temporarily.   Also, the short-term count from 3250 calls for a move to 3320.  Whether we stop there or go a little higher, the most likely short-term scenario is for the correction to continue into the middle of November.
  •  
  •  
  •  
  • UUP (dollar ETF) ($USD chart not available from this data provider)
  •  
  • UUP is holding in a sideways move which should see another pull-back into its 3-mo cycle low before continuing the shallow incline pattern.  This is probably a consolidation in a downtrend which will result in another retest of the low by the next 3-mo cycle (after the current one).  It does not look as if much up or down movement is going to take place over the next few weeks.
  •  
  •  
  • GDX (gold miners)
  •  
  • GDX continues to correct after breaking below its channel line.  34.50-35 is still likely to be reached before a new uptrend gets under way.
  •  
  • PAAS (Pan American Silver Corp)
  •  
  • PAAS is expected to continue a consolidation which is similar to that of GDX, but perhaps even more shallow.  Both could end their correction in conjunction with a stock market low about the middle of November.
  •  
  •  
  • BNO (U.S. Brent Oil fund)
  •  
  • BNO continues to move in a sideways pattern which may turn out to be a small base when converted into a P&F chart, with little upside potential.
  •  
  • SUMMARY
  •  
  • SPX is in a corrective pattern which should continue at least into mid-November.  There is an outside possibility that it could drop as low as 3050 by then. 

Andre

NOTE: You may now view our new website at https://marketurningpoints.com

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