Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

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

Stock Market In the Process of Making Important Low

Stock-Markets / Cycles Analysis Mar 24, 2008 - 08:04 AM GMT

By: Andre_Gratian

Stock-Markets

Best Financial Markets Analysis ArticleCurrent Position of the Market
SPX: Long-term trend - Election years that fall in the 8th year of the Decennial pattern call for consolidation in the early part of the year followed by a strong finish. But the 6-yr cycle which is scheduled to bottom in late Summer/early Fall could also play a restraining role, followed by an eventual bull market top in 2009-2010.

SPX: Intermediate trend - an extended intermediate-term consolidation is in the process of ending and may already have ended.


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 determines 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 ajg@cybertrails.com .

IS AN OLD MARKET LEADER LEADING THE MARKET AGAIN?

Overview:

A picture is worth...! I could probably rest my case by simply showing the above chart. For several weeks I have been discussing sentiment and other indicators pointing to January being a potential low of the correction. Some of these indicators can be early, and it took a while for the market to generate the proper amount of base building accumulation before it could reverse but, judging by the action of GE (above), it now appears ready.

As you can see from the following charts of some of the main indices, they seem to be only one step behind. Note the similarity in the base patterns with GE, and in the MACDs which all show positive divergence. The Dow Jones Industrials is a little ahead of the others, having remained above its January low during the declines of the last two weeks and it is very close to breaking out of its trend line, but they are all basically at the same state of readiness.

What's ahead?

Momentum:

Let's take a closer look at a daily SPX chart. After making its low in January, the index traded in a broad range for 8 weeks, ending with a test of the low which failed by only a few points intra-day when the 10-wk cycle made its assumed low. You could make a case for this cycle to have bottomed a week earlier, but this is something that will have to be verified with its next phase.

That low produced positive divergence in both indicators and on Friday, the A/D indicator (lower) finally joined the momentum indicator in producing a weak buy signal. A corresponding buy signal was given by price when it closed outside of its short-term downtrend line a second time, but it still has to close outside the next trend line of a higher degree before we can speak of an important reversal.

The weakness of the A/D oscillator buy signal suggests that there may be a little more consolidation before an attempt at going through the more important trend line can take place. However, judging by GE's chart, it's probably only a matter of time.

After this trend line is overtaken, the next challenge will be the former short-term tops of 1388 and 1396. Only when these have been surpassed can we say that we have an intermediate reversal.

Cycles

Another date of interest is March 22. This is the next Martin Armstrong business cycle date which has frequently had an impact on the stock market in the past ... Was it instrumental in bringing about the 3/16 low or is its impact still ahead of us? That remains to be seen, but some cycle analysts are concerned about another cycle possibly bottoming just ahead of us: the 5-yr cycle which is expected at any time with early April as the best estimate. And then, the 9-mo Hurst cycle is also due in April-May. So we may not be ready to get back into a firm uptrend until all of these are behind us.

What kind of an uptrend will it be with the 6-yr and 7-yr(?) cycles bottoming in the Fall? Will the 8th year of the Decennial pattern prevail and end this correction in the early part of the year as it usually has, or will this be an aberration as in the case of 1998? There are still many uncertainties ahead, but the whole picture seems to indicate that we are just about ready to complete the intermediate downtrend with some of the sentiment readings being the most bullish since 2003 and even beyond, in some cases

Projections:

On the downside, the market is still trading within the range of the projection zone which was generated when it broke the 4.5yr cycle low.

On the upside, no reliable projection can be made until we are certain the base pattern is complete and we have broken above the important short-term tops of 1388 and 1396, but if the low of the correction remains 1257 and we do surpass those tops, the first target for the SPX would be about 1470.

Breadth

During the month of March, the McClellan oscillator declined to an oversold level from which it has rebounded and is only now approaching the zero line. This has caused the Summation index to continue falling, but it is still well above its former lows. It will need to turn up and rise into positive territory to confirm that intermediate strength is returning.

The short-term A/D oscillator gave an unconvincing buy signal on Friday.

Market Leaders and Sentiment

All sentiment indicators are bullish, some reaching levels they have not seen since 2003 or earlier. The Insider Trading Ratio index remains bullish.

As you can see above, GE has gone from making a new low to a sharp bullish reversal.

The NDX/SPX relationship remains positive on the intermediate-term trend and neutral on the short-term.

The Banking index, is in basing pattern similar to the other indices and was up sharply on Friday, attempting once again to break out of its year-long down channel.

Summary

Some sentiment indicators suggest that an important low may be forming and GE, which has consistently been a market leader, has already made a very strong bullish reversal, but the SPX and other major indices may need a little more basing action before reversing their intermediate downtrend.

The following are examples of unsolicited subscriber comments:

What is most impressive about your service is that you provide constant communication with your subscribers. I would highly recommend your service to traders. D.A.

Andre, You did it again! Like reading the book before watching the movie! B.F.

I would like to thank you so much for all your updates / newsletters. as i am mostly a short-term trader, your work has been so helpful to me as i know exactly when to get in and out of positions. i am so glad i decided to subscribe to turning points. that was one of the best things i did ! please rest assured i shall continue being with turning points for a long while to come. thanks once again ! D.P.

But don't take their word for it! Find out for yourself with a FREE 4-week trial. Send an email to ajg@cybertrails.com .

By Andre Gratian
MarketTurningPoints.com

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 strategy.www.marketurningpoints.com

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

6 Critical Money Making Rules