Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Only Minor Top Ahead

Stock-Markets / Stock Market 2017 Oct 16, 2017 - 12:48 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market

SPX Long term trend:  Continues to make new highs with no sign of a major top in sight.

SPX Intermediate trend:  A re-accumulation phase at the 2500 level has produced higher counts which should provide higher prices before a reversal takes place.

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 discuss 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 anvi1962@cableone.net

 

  • Only Minor Top Ahead

Market overview:    

We are approaching the full count from the 2500 re-accumulation level, but it is likely that we will get there through a series of fits and starts and not directly.  This will be dictated by the very nature of the market itself that requires that projection targets be reached in a structured manner which is the essence of price progression.  Cycles also play a complementary role and, except for a minor cycle which is on the verge of bottoming, there are none capable of moving the market appreciably to the downside and ready to make their lows imminently ahead.  In fact, the soonest we can expect an important correction to start is probably still at least a couple of weeks away.  In the meantime, higher prices are likely.

The steady move upward without any significant pull-back has frustrated the bears, but under the current market conditions, there is little to be done for them to grit their teeth and learn patience.  The simplest way to assess what’s ahead is to look at a weekly and a daily chart.  The weekly indicators are at their highest levels since last October, surpassing in height everything in-between.  This is proof that the market is not nearly ready to have an important correction.  Negative divergence will have to show before this happens, as it did in June 2015 and August 2016.  Even the daily oscillators will need to complete a topping formation before becoming negative.  They may just be starting to do this; and future  trend lines will have to show deceleration by connecting lows at less steep angles.  All this must happen before we can expect a good correction to take place. 

Analysis: (These Charts and subsequent ones courtesy of QCharts.com)

  • Daily chart    
  •  
  • Some deceleration is appearing in the intermediate-term trend, as shown by the inability of the index to rise to the top of the blue channel, but none is evident in the short-term trend since price has risen all the way to the top of a secondary (green) channel where it is beginning to flatten out as it encounters resistance.  That, and the fact that all the oscillators are showing negative divergence is an indication that a reversal is about to take place, but I would not bet on its being anything other than one of a minor nature.  There is too much upside momentum and the divergence is only the result of traders not willing to step in at the very top!  This privilege is reserved for those who have little market experience.  But neither will experienced traders be waiting very long before buying back in.  They are very much aware that  little distribution has formed and therefore the anticipated pull-back cannot be all that great.  Nor, as suggested in the Overview, are there any important cycles making their lows in the immediate future -- not until January.  So, there is still time for the incomplete structure to complete and for distribution to form.  The current level of distribution is not enough to bring about anything more than a couple dozen points on the downside, if we come down right away.  There are, however, higher counts available from the 2500 level; and if you go with the odds, you should be looking for higher prices before too much happens on the downside. 
  •  
  • Remember what I said earlier about the weekly oscillators still being in an uptrend and having to be muted before we can expect much of a reversal.  Here, you can see the daily oscillators are showing divergence, but the CCI is still very high and will have to gradually drop closer to the zero line before it can be expected to go through and give a sell signal.
  •  
  •  
  • Hourly chart
  •  
  • From SPX 2417 on 08/17, it has been pretty much a straight up move with only minor consolidations along the way.  More of the same is expected as the index begins to roll over in preparation for making a rally high.  But it won’t be right away.  The strength in the higher degree time frame suggest that some deceleration will have to occur, first. 
  •  
  • If I am correct that no important cycle is likely to bottom until January, we could push this uptrend into late November before a reversal takes place.  This is just a guess.  We’ll firm up the date when the market give us the advance warning that it is about to roll over. 
  •  
  • There is a minor cycle due (ideally) early next week which could bring about a little pull-back before we move higher.  On the other hand, the current phase target lies a few points higher and the index may decide to reach it first, on Monday.  The oscillators, which are already declining, place the odds on the former, especially since we appear to be making a small terminal pattern.  But I still would not take it for granted and would let the market speak for itself.
  •  
  •  
  • An overview of some important indexes (daily charts)
  •  
  • The indexes which stand out this week (in a minor way), are the IWM (lower, left), followed closely by XBD (third on the bottom).  They offer the most contrast to SPX in that they have obviously been under distribution for the past two weeks, whereby others have forged ahead more forcefully.   I admit that I am making a mountain out of a mole hill, but it could be an indication that the market is entering a topping zone which will become more manifest over the next couple of weeks.  This does not preclude in any way that we are still in a very strong bull market which shows no sign of being close to ending.
  •  
  •  
  • UUP (dollar ETF)
  •  
  • After essentially reaching its 23.50 P&F projection (23.66 low), UUP is consolidating its recent oversold bounce, and could be getting ready to extend it.  Moving through the 24.50 resistance would be a positive accomplishment.
  •  
  • GDX (Gold Miners ETF)
  •  
  • GDX is at a critical level.  At 23.84, it has now retraced .382 of its previous correction from the 25.58 top.  It’s attempt to move higher, which is better seen on an hourly chart, was rejected on Friday.  One of the reasons for this is that it has a 25-day cycle bottoming next week, which could restrain it further.  The key to revealing its current position will be what it does after that cycle has made its low.  If it can continue its current uptrend past 24.20, it will begin to take on a bullish tint.  However, if it cannot continue its upside momentum aggressively past that level, it will be at risk of pulling back sharply into the year-end cycle lows.
  •  
  • USO (United States Oil Fund)
  •  
  • USO has another opportunity to show that overcoming the secondary channel was not a fluke.  If it can rise above the next purple downtrend line, it will have a chance to pit itself against the real resistance line which presently lies around 11.25, and which is reinforced by the overhead supply at the former top.  Until USO meets that challenge successfully, it will probably continue to stagnate in a wide base formation.
  •  
  • Summary
  •  
  • There is some technical evidence that SPX is coming into a minor top (which may already have arrived), in order to comply with the bottoming of the 6-wk cycle next week -- unless it first decides to push higher to fill its ca. 2565 projection. 
Andre

For a FREE 4-week trial, send an email to anvi1962@cableone.net, or go to www.marketurningpoints.com and click on "subscribe". There, you will also find subscription options, payment plans, weekly newsletters, and general information. By clicking on "Free Newsletter" you can get a preview of the latest newsletter which is normally posted on Sunday afternoon (unless it happens to be a 3-day weekend, in which case it could be posted on Monday).

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