Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Probing for a Top

Stock-Markets / Stock Market 2021 Jul 12, 2021 - 03:43 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long-term trend:  There is some evidence that we are still in the bull market which started in 2009 and which could continue into 2021 before major cycles take over, and it ends.  A move up to ~4500 is possible before the current bull market makes a final top and SPX corrects into its next major cycle low due in 2023.

SPX Intermediate trend:  SPX has likely reached the end of an intermediate phase. 

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 agratianj@gmail.com

 

Probing for a Top

Cycles:  Looking ahead!

7-yr cycle – Last lows: 2009-2016.  Next low: ~2023

Market Analysis (Charts, courtesy of StockCharts)

Long-term review

DJIA

Analyzing the trend from the March low, DJIA has steadily decelerated in the past few weeks and made a high two months ago which it has not been able to surpass; but, although it has broken its long-term trend line, it has not yet been able to generate a downtrend. A few high-tech components have been able to keep it from exhibiting real weakness.



NDX

These high-tech stocks and others which make up the NDX have driven the index to new all-time highs day after day. Starting this week, its indicators are beginning to lose their upside momentum and are giving an inkling that they may be about to reverse.  If they follow through, it could mean that NDX is ready to challenge its long-term uptrend line as well.



SPX

A hybrid of the two above indexes, SPX is stronger than DJIA and weaker than NDX, but may be about ready to join the former with a broken trend line.  Each of the past three weeks, the index closed on its high of the week but, although it made a new high last week, it was only by a fraction, and both indicators are displaying strong negative divergence which could forecast an imminent move below the trend line. 



SPX daily chart

The daily chart of SPX has shown a pick-up in volatility over the past few days with a 70+ point drop on Thursday followed by a rally to a new high on Friday.  In the last newsletter I suggested that a base projection pointed to the end of a bullish phase at about this level which was being reinforced by the cyclic configuration of this index.  Last week’s action is probably part of the process of establishing a top, including the volatility which forms the necessary congestion through a set of reversals on the P&F chart denoting distribution.  The combination of price analysis supplanted by indicators, P&F projections, and market cycle awareness (courtesy of Eric Hadik (insiide@aol.com)) provide a fairly accurate reading of what the market is doing.  The current action strongly suggests that an important top is in the process of forming.  The base P&F formation created in March 2020 shows the possibility of higher levels being attained before the bull market comes to an end as the 7-year cycle due to bottom in 2023 reverses the current trend, but P&F charting only produces approximate targets, so we cannot determine, at this time, if we are already coming to the end of the bull market, or if this is only going to be an intermediate correction marking the last correction prior to the final bull market top. 

Elliott Wave theorists argue that a decline into early 2023 would not put an end to the bull market which started in 2009, but that SPX would still make a new high that would mark the true ending of the 2009 bull market after which, a devastating bear market would take hold.  Of course, defining what constitutes a bear market is a matter of semantics.  If you think that a ~2-year decline into early 2023 is long enough to be called a bear market, then so-be-it!



SPX hourly chart

With a new high struck on Friday, the former trend line was invalidated and a new one drawn. But with the short-term cycle low due in about a week, the new one should give way and be followed by an estimated 80-point decline, based on an incomplete P&F pattern at this time which will have to be confirmed after the reversal takes place.  If we should continue lower, there is good support starting at about 4260. 

After the cycle has made its low, we shall have to see if SPX can make another new high.  If this turns out to be an intermediate term top, it is possible that the next rally will only challenge the current high and create additional congestion from which we can then determine the extent of the total correction.  At this time, if we are in the process of correcting the move which started from 3723, we should expect the decline to continue down to about 4030 (a 50% retracement).

There was no liquidation in the futures after Friday’s close, so it is possible that we could push just a little higher on Monday before the correction takes hold. 

  •  
  • GDX (gold miners) (dly)
  •  
  • GDX has now pulled back to its trend line where it should find support and rebound, but we should not expect a big rally to start from there.  More congestion will probably have to form between 35 and 40 to create another base capable of supporting a bigger move before the index can overcome its recent short-term peak.   
  •  
  • PAAS (dly)
  •  
  • PAAS has declined to the lower confines of a broad consolidation band which is now a year long. Like GDX, when it comes out of its short descending channel it will be limited to a rally of about four points and then it will have to form a higher shelf which will serve as a base that will eventually enable it to move out of the larger pattern.  This process could take several months.
  •  
  • BNO (Brent oil fund) wkly
  •  
  • A weekly chart is best to show the progress that BNO has made since the bottom of the severe decline from its 46.68 high of mid-2014.  A .382 retracement of that downtrend would take it a couple of points higher, but it may need to pull back to the larger trend line and around 18 before finishing that move. 
  •  
  •  
  • USD (dollar) (wkly)
  •  
  • The dollar is consolidating after finding support at ~89.  It could continue to move sideways for several more weeks and months until it arrives in the vicinity of the top channel line.  It has severe resistance starting around 95 which has already repelled it once and may be about to do so again when it gets back to that level -- which would also represent a .382 retracement of the decline from its 104 level.  In other words, it does not look like it is going very far in either direction for some time with a major trend decision most likely postponed until it reaches the outer corrective channel line.
  •  
  •  
  • SUMMARY
  •  
  • SPX is probably in the process of creating a double-top which will push prices back a few days after mid-month and into the short-term cycle low.  The extent of the decline into that time frame and the following rebound will determine what kind of a top the index is currently making with a bias currently being toward one of intermediate dimension. 

Andre

NOTE:  I have a new email:  agratianj@gmail.com

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