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
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market One More Push Higher Before Correction Sets In

Stock-Markets / Stock Markets 2011 May 16, 2011 - 05:27 AM GMT

By: Andre_Gratian


Best Financial Markets Analysis ArticleVery Long-term trend - The continuing strength in the indices is causing me to question whether we are in a secular bear market or two consecutive cyclical bull/bear cycles. In any case, the very-long-term cycles are down and, if they make their lows when expected, there will be another steep and prolonged decline into 2014-16.

Long-term trend - In March 2009, the SPX began a move which evolved in a bull market. Cycles point to a continuation of this trend for several more months.

SPX: Intermediate trend - The intermediate trend is still up.  After the 1370 projection was reached, the SPX started a normal consolidation pattern which is ongoing, but nearly complete. The intermediate uptrend is expected to resume afterwards.

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

After reaching its 1370 projection, the SPX started a consolidation process -- which is normal. The stock market progresses through a process of accumulation-uptrends, distribution-downtrends, which repeats itself continuously in various degrees over various time frames. Elliott came to the same conclusion when he identified corrective and impulse patterns as the basic frame work of the market. Point & Figure charts give us a much clearer picture of this process than bar charts. In addition, they have the capacity to tell us how much energy is stored in these accumulation and distribution phases, and how far the following move is likely to carry.

Based on a conservative count taken across the 2009 base, the top of the bull market could be as low as 1365, or substantially higher if the liberal count prevails.

Since the index has already reached 1370, we know that the conservative count has been filled, and that we could be at a bull market top. Are we done? Probably not! As the trend develops, there are periods of consolidation which are known as re-accumulation or re-distribution phases that are very helpful at projecting the extent of the next move. Several of these past patterns point to another push higher before we get to the end of the current intermediate trend. I am going to assume that they are correct and that the consolidation which is underway is only a precursor of the next uptrend.

Let's go to the charts and see if we can find some justification for this premise.

Chart Analysis

One thing which I forgot to mention when we looked at the SPX Weekly Chart last week was the condition of the oscillator. Based on that alone, we could surmise that a top has been reached and that we are about to start a severe correction. We can keep it in the back of our minds as we analyze other aspects of the market to see if we have confirmation, or if a bullish stance is still warranted.

We'll begin with the Daily Chart and go directly to the oscillators. The top one confirms the weekly, but the bottom one does not. If they both told the same story, I would be more concerned. As it stands, the A/D indicator is neutral-positive. Also note that the top oscillator was very overbought when the SPX touched 1370 and showed no negative divergence before rolling over. If (when?) the index goes to a new high, it should show some negative divergence and signal the end of the move from 1249.

The price chart is still in a clear uptrend, trading above its blue intermediate channel and substantially above the 200-DMA as well as the bottom of its long-term channel. This is not the picture that you usually get at a market top. This tells me that: 1) the top of the intermediate trend from 1011 has not yet been reached, and that 2) since we are likely to surpass the conservative bull market count of 1365-70, we should begin to pay attention to the liberal count. We are first likely to have an intermediate correction, and then finally rise into the bull market high. This could take us into 2012.

If there is another up-move before the end of the intermediate trend, it means that we must be making a corrective pattern. We can see it much more clearly on the Hourly Chart.

1370 was the top of the second phase from 1249 and the level from which the correction started. My modicum of Elliott Wave knowledge tells me that we are in a corrective pattern (which is either a flat or a triangle) that will require a few more days to complete. I have all sorts of channels drawn on this chart to identify the various trends. The main channel of the correction is outlined in light red and the "c" wave in black. The trend line from 1249 is green, and the channel from 1249 is bordered in gray. The letter "c" on the chart is not intended to pin-point either price or time. It will not matter if the green trend line is broken, and it is possible that we could decline all the way down to fill the (light blue) gap, but we will probably remain within the boundaries of the gray channel. When the correction is over, I would expect to start phase #3 with a bang!

The indicators tend to support this analysis. They are not in a position to give an immediate buy signal and may have to show some positive divergence just before they do.




There are a number of near-term cycles which are indicated on the daily chart. Probably the most reliable one is marked with the black asterisk and signals a potential high. If does not mean that it will bring about a correction of equal degree to those of the recent past, but it could make its presence felt, because it is followed by a 13-wk cycle the following week.

I have not followed the Armstrong cycles very closely, lately. But considering that we should be in an uptrend, it could signal that the top of phase #3 will occur on about 6/13.


The NYSE Summation Index (courtesy of has shown a pretty neutral reading in the past month. It is not indicating immediate weakness for the market.

NYSE Summation Index


The long-term SentimenTrader (courtesy of same), is not yet at a dangerous level for the market. This supports the view that we should move higher before finding an intermediate top.

Furthermore, the short-term index is signaling a potential short-term low, warning of the approaching end of the small down wave in the SPX.


I have created my own leading indicator. It consists of a group of 6 indices and stocks which have consistently predicted a turn in the equity markets. All six components are currently bearish, warning of continued short-term weakness. I follow them on a 60m chart.

Dollar index

The respective projections for the dollar and UUP came out slightly differently. The dollar went one point below its 74 projection before finding terra firma, while UUP met its 21 target exactly.

The index has had a good rally over the past two weeks but it should soon come to the end of its initial break-out move and begin building a base. A .382 retracement of the last wave down would take it to about 21.80. This may be the extent of the move for now.


Gold, as expected, did the reverse of the dollar. After reaching its 153-54 projection (the high was 153.61), GLD had a dramatic three-day reversal which took it down eleven points. But that's only about a 7% loss. Silver, on the other hand, has continued down for the past two weeks, and lost a hefty 33% of its value.

Below, I show a weekly chart of GLD. The quick, sharp correction does not look very significant on this scale, and it is clear that there were far more speculators in silver than in gold. Nevertheless, even though GLD has already recovered exactly fifty percent of its loss, this looks like the beginning of a more substantial correction -- perhaps one of intermediate nature.

The first support level is obvious. The price may find it difficult to penetrate very far below 139 right away, especially since it is in the vicinity of the 2+-year trend line. But it's not inconceivable that the long-term trend line will be broken. It depends on how much of a rally the dollar can muster, and how serious the approaching intermediate correction in equities will be. We will know more precisely what to expect when the top formation has been completed and a P&F projection can be made.


Above, is a weekly chart of USO, the oil ETF. It, too, suffered an instantaneous set-back after reaching its 46 projection. So far, it has dropped about 17% from its high but, like GLD, it looks like only the start of a deeper correction, probably of intermediate nature. It may find support on its main trend line, around 35. If the current ratio holds, it would correspond to WTIC declining to around 89. That closely matches the P&F projection for the correction low in WTIC.


The SPX is consolidating after reaching its phase projection of 1370. While there is a minimal chance that this could turn out to be an important top, the odds favor one more push to a new high before an intermediate correction sets in, with the eventual top of the bull market at a much higher level.

Note: I have started to follow TLT closely. I find it to be a valuable addition to the VIX as a predictor of SPX reversals. Both TLT and VIX are part of my leading indicator index. Specific signals generated by TLT and this indicator will only be discussed with subscribers.


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

6 Critical Money Making Rules