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
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Odds Favour More Declines Ahead

Stock-Markets / Stock Markets 2011 Sep 06, 2011 - 05:38 AM GMT

By: Andre_Gratian


Best Financial Markets Analysis ArticleSPX: Very Long-term trend - The very-long-term cycles are down and, if they make their lows when expected, there will be another steep and prolonged decline into about 2014.

SPX: Intermediate trend - The bull market which started on March 2009 at 667 appears to have ended at 1370. It is unclear if the first intermediate decline of the new bear market is over.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of 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

Market Overview

The second rally phase of the equity indices ended on Wednesday 8/31at 1231 on the SPX. Or is it the first? It depends on what kind of an analyst you talk to. Some EW experts believe that the decline back down to 1121 was a wave V failure from 1371, and that is when we started a corrective wave up. If it was not, and if we just ended a corrective wave IV, we are heading for a new low. We'll find out which is right over the next few weeks. What is certain is that the depth of Friday's retracement has nullified the possibility of the rally developing into an impulse wave for SPX.

In the last newsletter, I discussed the cycle configuration that lies ahead which will most likely determine the course of the market (until early October when the 3-yr cycle is scheduled to make its low). In spite of the current weakness, the trend may soon turn up, perhaps until 9/12 when the 14-15-wk cycle will make its high (assuming that it has not already done so). It will be between that date and early October that the market will be the most vulnerable to make a new low.

My crystal ball for early next week is prophesizing more weakness into about 1165-1158, and then the beginning of another near-term uptrend which could last until that cycle top on the 12th. That date is also interesting from an astrological view point. According to Raymond Merriman, the renowned Financial Astrologer, the second half of September has astrological signatures which could be adverse to the stock market. After early October, we should have a better idea of what kind of market trend we are in. In spite of the recent rally my long-term trend lead indicators have only consolidated and are still bearish. This, and the fact that the intermediate downtrend channel is still intact continue to give the long-term market trend a negative rating.

Let's illustrate the current market position with charts.

Chart analysis

It should not be a surprise that the rally found resistance where it did. The intersection of two channel lines provided some strong resistance which caused some hesitation in the SPX on Thursday. The coup de grace was administered by the jobs report on Friday, sending prices into another tail spin. This action puts an end to the budding uptrend which started at 1121 and pushed them back into a neutral state from which they will await their future fate. Should they be attracted by the 14-15-wk cycle top scheduled for the 12th, they will still have a chance to break out of the green channel but, as long as they are confined to the brown one, the SPX will remain in an intermediate downtrend.

It is not possible to make a reliable long-term forecast for the market until we see what kind of damage the bottoming 3-yr cycle will inflict, in early October. It is reasonable to assume that when that cycle turns up, it should provide some lift to prices for a few weeks. But if its low turns out to be the completion of wave V from 1370, and extends below 1101, the long-term destiny of the market will most likely be sealed, no matter what kind of rally is generated afterwards.

Since only the bottom indicator has given a short-term sell signal, it is premature to say that the index has already reversed and is ready to go lower.

We can get a better feel for the near-term by looking at the Hourly Chart. In contrast to the daily chart indicators which have not given a decisive sell signal, the hourly ones did. They are not ready to turn up and give a near-term buy. If the cycle topping on 9/12 exerts enough upward pull, it can entice the index into another near-term uptrend. The base which was formed at the 1121 level has two distinct phases from which potential counts can be drawn. The small one, marked in dark green, provided targets of 1232-1238. The rally stopped at 1230.71. The larger base has a projection to 1284. Considering where the SPX closed on Friday -- especially if it drops lower before starting up - the odds that target will be reached are practically nil.

More likely, the base that is currently being formed - assuming that we turn up after touching 1165-1158 - will dictate the extent of the next near-term move. Since it is still a work in progress, we'll have to wait until it is complete. My short-term lead indicator is still bearish, so there is a good chance that we won't reverse from the level at which we closed. The hourly indicators also need to get into a better position before they can give a buy signal. This could take a day or two to achieve.


I thought that the 14-15-wk high-to-high cycle (which has been very reliable for the past two years) had topped early, at 1231. It has done this occasionally in the past. But it could still make its high around 9/12. The best way to describe what lies ahead is by repeating what was said earlier.

"That (14-15-wk) cycle top is usually followed by a sharp decline and, in this case, will be assisted by the 67-wk cycle which is due for its low around 9/19. That should provide a bounce which will be cut short by the 3-yr cycle due in Oct. Then, the 17-wk cycle will be due mid-October.

If each of these cycles has even a moderate effect on the market, we are in for a volatile period. Beyond that, I am very interested in seeing the end result of this cyclic time frame, especially how it manifests itself on the P&F chart."


The NYSE Summation Index (courtesy of still looks very weak. Although it has rallied from its low, it is still negative and remains well below its 50 and 200-DMAs. The fact that it has dropped below the July low is an even bigger negative. This enhances the odds that we have started a bear market and that it's only a matter of time before the SPX makes a new low. We would have to see a tremendous improvement in the Summation Index before the odds shift to the positive side.

HYSE Summation Index


The readings of the long-term and short-term indices of the SentimenTrader (courtesy of same) are mildly positive. These readings are not telling us anything decisive at the moment.


The next indicator still looks relatively strong and does not predict any immediate sustained weakness in the equity indices (unless it's "different" this time). As I pointed out last week, NDX is much stronger than SPX and it is conceivable that it could make a new high before the long-term decline resumes.


TLT is a good long-term indicator for the stock market. It moves inversely to it, charts well, and counts well. It has a short-term count of 114-115 which could be achieved Tuesday or Wednesday, and a long-term count to 126.

As you can see, the first top corresponded exactly with a parallel to the bottom trend line and acted as resistance to produce an immediate retracement. The next parallel will be in the vicinity of the short-term count over the next day or so, and if the market has a little more weakness on Tuesday, it could easily send TLT to that area for a short-term top, followed by a correction.

The count to 126, if it is reached, would coincide with a much lower low for the SPX, another reason to consider that we may have started a bear market.


Since last week's decline brought so much weakness, it has taken the wind out of the sails of any bullish forecast for the stock market over the next few weeks. Until proven otherwise, the odds still favor more long-term decline ahead.

The time frame between now and early October should bring some clarity to the current trend, especially if the SPX makes a new low by that date.


If precision in market timing for all time frames is something which is important to you, you should consider a trial subscription to my service. It is free, and you will have four weeks to evaluate its worth.

For a FREE 4-week trial.  Send an email to:

For further subscription options, payment plans, and for important general information, I encourage you to visit my website at It contains summaries of my background, my investment and trading strategies and my unique method of intra-day communication with Market Turning Points subscribers.

By Andre Gratian

A market advisory service should be evaluated on the basis of its forecasting accuracy and cost. At $25.00 per month, this service is probably the best all-around value. Two areas of analysis that are unmatched anywhere else -- cycles (from 2.5-wk to 18-years and longer) and accurate, coordinated Point & Figure and Fibonacci projections -- are combined with other methodologies to bring you weekly reports and frequent daily updates.

“By the Law of Periodical Repetition, everything which has happened once must happen again, and again, and again -- and not capriciously, but at regular periods, and each thing in its own period, not another’s, and each obeying its own law … The same Nature which delights in periodical repetition in the sky is the Nature which orders the affairs of the earth. Let us not underrate the value of that hint.” -- Mark Twain

You may also want to visit the Market Turning Points website to familiarize yourself with my philosophy and

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