The 7 year long mature stocks bull market has got off to a disastrous start to 2016, apparently the worst start to a new year EVER! Which on Friday saw the Dow close sharply lower at 15,988, down 391 points and recovering from an earlier 537 point plunge. Whilst the relentless selling of the past 2 weeks has increasingly emboldened the usual suspects, the perma bears who tend to see the start of a bear market in EVERY dip. However for those who actually managed to ride this 7 year long stocks bull market (15 Mar 2009 - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470 ), which for its first full 3 years at least was a stealth bull market that was met with denial from right across the financial media, never mind the blogosfear, now have to seriously consider whether the relentless weakness could be an early sign that the stocks bull market may be rolling over into a bear market.

Now, I for one am not prone to knee jerk reactions but instead rely on the laborious process of in-depth analysis so as to arrive at that which is the most probable outcome, and where the stock and related inter-markets are concerned my last in-depth analysis of Mid September 2015 concluded in a forecast for a rally from the then so called start of bear market calls of the perma-crowd to near a new all time high by the end of 2015 as excerpted below:

13 Sep 2015 - Stock Market Dow Trend Forecast for September to December 2015

My final conclusion is for continuing weakness that will result in a volatile trading range with a probable re-test of the recent low of 15,370 by Mid October that will set the scene for a strong rally into the end of the year that could see the Dow trade above 18,000 before targeting a gain for a seventh year in a row at above 17,823 as illustrated below:

And as the earlier chart illustrates that the Dow did trend close to the forecast into the end of the year. My next in-depth analysis for the stock market will seek to map out a trend for several months and probably for the whole of 2016, so there is little point in giving instant reactions to daily gyrations which are akin to a coin toss response that tends to be the norm where most instant daily market commentary is concerned. Instead, I am going to complete my intensive process of in-depth inter-market analysis to conclude in detailed trend forecasts for several key markets all of which are linked which is the real secret towards arriving at that which is the most probable outcome, rather than wholly focusing on just one market which would mean missing a good 50% of the big picture that influences a market i.e. the impact of the future crude oil price trend on the stock market.

So ensure you are subscribed to my always free newsletter (only requirement is an email address) for the following pieces of analysis of which crude oil is imminent.

Crude Oil Trend 2016
Interest Rates 2016
US Dollar Trend Forecast
US House Prices Forecast 2016 and Beyond
Stock Market Trend Forecast 2016
Gold and Silver Price Forecast 2016

However, having traded markets for over 30 years, I can say that today's market neither resembles, 1987, 2000, nor 2007. Which implies to expect something different to that which transpired following each of those market tops. So pending the final conclusions of my ongoing series of in-depth pieces of analysis, my view is that the stocks bull market is currently undergoing it's most severe correction to date which has further to go and may technically turn out to be classed as a bear market but nothing on the scale of the last two bear markets in terms of percentage decline and duration. In fact the next few weeks could prove to be a great buying opportunity.

Meanwhile Robert Prechter has made his research available in a special report that can be accessed for free that includes a free trial offer - How to Survive and Prosper in this Global Financial Crisis.

Also subscribe to our Youtube channel for notification of video releases and for our new series on the 'The Illusion of Democracy and Freedom', that seeks to answer questions such as 'Did God Create the Universe?' and how to 'Attain Freedom' as well as a stream of mega long term 'Future Trend Forecasts'.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.