Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

SPX Going for the Major Stock Market Top?

Stock-Markets / Stock Market 2021 Jul 27, 2021 - 03:51 PM GMT

By: Andre_Gratian

Stock-Markets 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 until 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 May wat to push all the way to the top projection before making an important correction.

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

 

SPX Going for the Major Top?

Cycles:  Looking ahead!

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

Market Analysis (Charts, courtesy of StockCharts)

SPX daily chart

According to the P&F base which was formed at the March 2020 low, SPX was capable of an uptrend which would take it up to the vicinity of 4550.  Point & Figure patterns only project price, not time.  Since the index reached an all-time high of 4410 on Friday, this should be getting us close to the final high, and it is important that we get this right because, with the prospect of a 7-year cycle low due in 2023, this market top could be followed by a severe correction which could last many months. 

We do not have to depend solely on an analysis of the price to determine the validity of the P&F projection, we can get the assistance of breadth indicators to confirm what is expected.  The McClellan oscillator and the McClellan summation index are excellent indicators which measure market breadth: the former on a shorter-term basis, and the latter on an intermediate basis.  Both indicators have been posted below the chart of the SPX, and all three charts span the uptrend which started from the March 2020 low.  We do not have to analyze the entire chart.  We only want to see if the breadth indicators support the view that we are approaching an important market top, and indeed they do!  While the SPX is still recording new all-time highs, the summation index peaked in December 2020 and maintained a strong positive reading until last month; then started to deteriorate and accelerate downward during the month of July.  It is now approaching the zero line and, at the current rate of decline, could cross into negative territory by the end of the month.  This suggests that we may be near to experiencing a market correction of intermediate nature. 

The sharp rally which occurred this past week lifted the shorter oscillator from an oversold level -- the lowest reached since March of last year -- but it remains in a downtrend, well below its June peak.  The next short-term peak in the oscillator could also be the next short-term peak in the market. 

Even with last week’s rally to a new high, the momentum indicators below the price charts remained well below their former highs, even though SPX made a new all-time high.  In other words, whether you look at the market on a short-term or on an intermediate basis, the indicators are flashing warning signs.

SPX hourly chart

The short-term cycle which was ideally due to make its low last Friday had brought only a mild correction to the index, and the sharp follow through on Monday was a bit of a surprise. But the rally which came afterwards was even more surprising, rising 180 points to a new high with nothing more than a 5-point retracement.  Finally, on Friday, there were signs that the rebound might have run its course.  The index was beginning to find resistance underneath the former broken trend line extension, and the CCI which had become sharply overbought was showing some signs of deceleration.  The cycle will enter its 5th day on Monday and could be ready for a pullback, even if we have not made the final high of the move.  Breaking the green trend line could bring about that first correction before continuing the rally to 4440 or a little higher.  

The question that we should ask ourselves is whether SPX intends to continue its uptrend until it reaches its final projection (which is deemed to be to about 4550) without having a good consolidation, first.  So far, the intermediate indicator shown above has only given a warning, not a sell signal.

  •  
  •  
  • GDX (gold miners) (dly)
  •  
  • GDX continues to correct.  It is in an area of support and will have to show that it is able to hold this level.  The best that could be expected short-term would be to build a small base from which it can try to get back into a short-term uptrend.  Until it shows the propensity to challenge its 50-dma, it is not likely to do very much on the upside and could continue to drift lower.  Moving outside of its short-term downtrend line would be a positive.
  •  
  • PAAS (dly)
  •  
  • PAAS has retraced to the bottom of its consolidation channel where it must find enough support to retrace its corrective trend.  It is also finding support from a previous intermediate high, which makes it all the more important that it hold this level.  Finally, the reason it should hold this support is because the entire corrective wave represents nearly a 50% retracement of the move from the March low.  The action of the next few days and weeks will be important.  If it can hold in this general area, it should start reversing its trend to the upside. 
  •  
  • BNO (Brent oil fund) dly
  •  
  • BNO broke a secondary trend line and found support on its primary line, which created a bounce.  If it cannot make a new high right away and closes below its 50-dma, it could retrace down to about 15.00
  •  
  • USD (dollar) dly
  •  
  • USD has strong overhead resistance between 94 and 95.  A move back to 95 would be a .382 retracement of the decline from its March 20 high, as well as the top of its corrective channel from that high.  Failing to go beyond that level and turning down would likely continue its intermediate correction. 
  •  
  • SUMMARY
  •  
  • SPX rallied sharply from its short-term cycle low and immediately made a new high.  As long as the cycle holds out, it could push to 4440+ before finding the next short-term top. 

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

© 2005-2022 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