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
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
THE INFLATION MEGA-TREND QE4EVER! - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Bump in the Road?

Stock-Markets / Stock Market 2021 Feb 02, 2021 - 04:33 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long-term trend:  There is some good evidence that we are still in the bull market which started in 2009 and which could continue into the first quarter of 2021 before coming to an end.

SPX Intermediate trend:  May continue until SPX reaches ~ 4150.

Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine 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

 Bump in the Road? 

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

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

Market Analysis (Charts courtesy of QCharts

SPX-IWM daily charts

This is the biggest retracement by SPX since a new intermediate trend started on 10/30.  IWM did not give warning that this was coming, except for some negative divergence in its oscillators, but this is not enough to suggest that we have started an important correction.  Also, IWM remains stronger than SPX for the time being.

SPX daily chart

In the last newsletter I warned that breaking below the green trend line which started in late October would initiate a correction, but I did not expect it to be anything severe since there was not warning from IWM.  In fact, this is turning into the biggest correction since the beginning of the new intermediate uptrend.  Still, although I believe the correction could last until mid-February, I do not think that it will turn out to be anything major.  At the most, based on the degree of distribution in the P&F chart, I would not expect the retracement to go beyond 3640. 

I had also mentioned that we should be wary of the negative divergence that had developed in the daily oscillators.  This does not always result in an important correction but first, it depends on whether the CCI goes negative, and then how long it remains in that state.  In this case, it did go negative on the first day of the decline and it remains so.  We should wait for positive divergence to re-appear before expecting an end of the correction to occur.

Structurally, the majority of corrections take place in a three-wave pattern (a-b-c), and by Friday we were most likely approaching the end of the a-wave.  If so, it could be the middle of the month before the entire structure is complete; perhaps in conjunction with the next 20-td cycle low due about 2/10-12. 

 

SPX hourly chart

The green trend line had three points of contact which provided support, but the fourth time SPX turned down it went right through it and kept on going for an initial drop of 138 points from the 3870 high.  Most of this took place on the second day of the decline, followed by a 5-hour rally of 98 points, and a subsequent 7-hour decline of 134 points to match the first leg of the correction as volatility ruled!  By the end of the week it was subsiding, and some deceleration was beginning to appear in the selling, but there could be some residue weakness on Monday before we complete the a-wave.  Positive divergence is already showing in the CCI, but the other two oscillators are still in a downtrend.

Congestion had been forming at the channel top for a few days before the decline started, and it is from this pattern that we can derive a potential count for the entire correction (3640).  The size of the pattern is the reason why a severe correction should not be expected; but volatility, its primary feature, could continue until it ends. 

If this is only the a-wave of the correction, we are one third of the way through it and will need waves “b” and “c” to complete it. 

  •  
  • UUP (dollar ETF) WKLY ($USD chart not available from this data provider)
  •  
  • UUP continues the uptrend that it started a month ago.  It reached its 50-dma and was pushed back slightly but may go through it without losing much ground.  It already consolidated after touching a small downtrend channel line and immediately resumed its attempt at moving higher.  Most likely, the index has started a move to the top of the larger bearish channel -- currently around 24.70 -- where it should find more resistance.
  •  
  •  
  • GDX (gold miners)-DLY
  •  
  • GDX is in the last throes of its corrective move. In another week or so, it should be ready to challenge the top of its correction channel line where it is not likely to meet a great deal of resistance since this will be the third challenge of that trend line, and since it has already built enough of a short-term P&F base to go through it. 
  •  
  •  
  • PAAS (Pan American Silver Corp-DLY)
  •  
  • PAAS looks even more ready than GDX to end its correction.  It is also more volatile, as witnessed by its action of the past two months during which it broke well above its top corrective channel line before dropping back to make a new (one day) correction low.  With an incipient rebound (b-wave) in the stock market, both GDX and PAAS could move a little higher (PAAS 35-37) before a final pull-back, followed by a clean breakout. 
  •  
  •  
  • BNO (U.S. Brent Oil fund)
  •  
  • After filling its target of 14, BNO was expected to correct before moving to 16.  It may continue to do so while the market completes its short-term correction and then moves higher. 
  •  
  •  
  • SUMMARY
  •  
SPX is undergoing a short-term correction which is already the deepest one since it started its intermediate move from 3234; but it is not expected to last longer than a couple more weeks, or to exceed a low of 3640.

Andre

Free trial subscription

With a trial subscription, you will have access to the same information that is given to paid subscribers, but for a limited time-period.   Over the years, I have developed an expertise in P&F charting (price projection), cycles (timing), EWT (structure), and general technical analysis which enables me to warn subscribers of pending reversals in market trends and how far that trend can potentially carry.  For a FREE 2-week trial, subscription options and payment plans, I encourage you to visit my website at www.marketurningpoints.com.

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