Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

World Stock Market Indices Due for a Correction?

Stock-Markets / Stock Markets 2011 Jan 12, 2011 - 01:39 AM GMT

By: MarketTimingCycles

Stock-Markets Best Financial Markets Analysis ArticleThe world Indices are due for a short-term correction, but the larger trend is still bullish. On January 10th last year we wrote: "The S&P500 has now touched the current upper trend line as formed since early last year. On January 15th 2010 we are also 45 weeks or 225 trading days after the March 2009 bottom. In Gann terms this point in time is typically a hard angle that typically come in as a high."  We now seem to be exactly at the same time for a correction to occur.


After some cycle inversions in the second half of 2010 the cycles are now aligning to come in sync again. We are now 52 weeks or in Gann terms 360 degrees away from the top in January 2010, so we could expect a turn at such a point. The FTSE100 has likely started to turn at exactly the same time as last year, but this is not yet confirmed. The S&P500 last year turned nearly 9 days later last year, so we expect the S&P500 in topping phase, unless we close above the latest high. All indices have been overbought some time which add strength to our assumptions, but whether a short-term top has been set need still to be confirmed.

However the medium term cycle crest our MTC4 is not due for some time yet, so we expect this to be only a minor correction or a consolidation on an up trend still intact. We have posted our short-term market position on our MTC cycles 2 and 3 below for both the FTSE100 and S&P500. Many other world indices are in the same position right now.

The short-term outlook

Using our MTC2 (Red) and MTC3 (Blue) dominant cycle we now expect the short-term top has occurred for the FTSE100 and possibly also for the S&P500 and many other World Indices.  See below charts on the S&P500 as well as the FTSE100.

Like last year the S&P5oo top could be well some 8 to 9 days away from now as the MTC2 cycle(Red) could still be forming its crest. You can expect a 4% to 9% correction once the short-term top has set in and will run for a couple of weeks into end of January 2011 and beginning of February 2011. Price Target: 1238-1195 +- 20 points. If we close lower than 1173 or higher than 1278 on the S&P500 this scenario is likely to be invalid. Be careful the main trend, a larger cycle than mentioned in this analysis is still forming its crest to be completed a couple of months to go. The typical correction expected could therefore be smaller than the earlier mentioned targets.

For the FTSE100 the MTC3 (Blue) has already turned and the MTC2 (Red) has just formed its crest and we closed lower on Friday. So a short-term top could likely have been set at the same point in time as last year.

You can expect a 6% to 10% correction on the FTSE100 once the top has been confirmed (a close lower than the low of last week)  and this downturn will run for a couple of weeks into end of January 2011 and beginning of February 2011. Price Target: 5872- 5641. If we close lower than 5519 or higher than 6090 on the FTSE100 this scenario is likely to be invalid. Be careful the main trend, a larger cycle than mentioned in this analysis is still forming its crest to be completed months to go. The typical correction expected could therefore be smaller than the earlier mentioned targets.

The medium term view

For the longer term we stay on the bullish side, unless we close lower than  lower than 1173 or higher than 1278 for the S&P500 and for the FTSE100 if we close lower than 5519 or higher than 6090. 

Conclusion

We are now 52 weeks or in Gann terms 360 degrees away from the top in January 2010, so we can expect a turn at such a point. The FTSE100 has already started to turn at exactly the same time as last year. The S&P500 last year turned nearly 9 days later last year, so we expect the S&P500 in topping phase for a short-term correction. All indices have been overbought some time which add strength to our assumptions. However the medium term cycle crest our MTC4 is not due for some time yet, so we expect this to be only a minor correction on an up trend still intact. Be careful this larger cycle is still forming its crest to be completed and in the end phase it is probably more powerful than the smaller cycles. 

The typical correction expected could therefore be smaller than the  earlier mentioned targets, or we could have only a sideways movement for a couple of weeks. Many other world indices are in the same position right now. For the medium term we remain on the bullish side, unless we close below the low or high on the prices mentioned in this analysis for the respective indices.

We will post more analysis as the next cycle turn develops. We will publish our roadmap and longer term view shortly from now once our services are setup. Please read our Happy New Year article on our new services. Take care and stay tuned.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. www.markettimingcycles.wordpress.com

This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer.


© 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