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

Stock Market Downtrend May Have Bottomed

Stock-Markets / Stock Markets 2013 Jul 01, 2013 - 06:32 AM GMT

By: Tony_Caldaro

Stock-Markets

Wild week! Monday started off with a gap down opening pushing the SPX down to 1560. Then for the next three days the market gapped up, hitting SPX 1620 on Thursday. Friday appeared to be a consolidation day as the SPX ended the week at 1606. For the week the SPX/DOW were +0.80%, the NDX/NAZ were +1.25%, and the DJ World index rose 1.3%. On the economic front positive reports outpaced negatives 11 to 5. On the uptick: durable goods orders, Case-Shiller/FHFA prices, consumer confidence/sentiment, new/pending home sales, personal income/spending, PCE prices, plus weekly jobless claims improved. On the downtick: Q1 GDP, Chicago PMI, median home prices, WLEI and the monetary base. Next week, a holiday shortened one: monthly Payrolls, Auto sales and ISM.


LONG TERM: bull market

We have counting this bull market as Cycle wave [1] of a multi-decade Super Cycle bull market. Typically these bull markets last about five years and unfold in five Primary waves. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but both Major waves 1 and 3 are subdividing into five Intermediate waves.

Major waves 1 and 2, of Primary III, completed by mid-2012. Major wave 3 has been underway since then. Intermediate waves i and ii completed by late-2012, and Int. iii ended in May 2013. The Intermediate wave iv downtrend may have just completed this week, with an Int. v uptrend now underway. When this expected uptrend concludes, possibly July/August, the market will end Major wave 3. Then after a Major 4 correction, a Major 5 uptrend will end Primary III. Finally, after a Primary IV correction a Primary V uptrend should end the bull market. We still expect this to occur by late-winter to early-spring 2014.

MEDIUM TERM: downtrend probably bottomed

We had counted the six month long Intermediate wave iii uptrend as five Minor waves ending at SPX 1687/1674. Over the next four weeks the market corrected 7.5% and confirmed the Intermediate wave iv downtrend. Soon after we received the downtrend confirmation the market started impulsing upward again. This has occurred a few times during this bull market. Nothing unusual.

From top to bottom, Intermediate wave iv declined from SPX 1687/1674 to 1560 in a complex a-b-c corrective pattern. The b wave rally was 56 points SPX 1598-1654. Off monday’s SPX 1560 low the market had rallied 60 points into Thursday’s 1620 high. A positive. The rally also appears to be impulsing: wave 1 SPX 1586, wave 2 SPX 1573, wave 3 SPX 1588-1577-1604-1595-1620, wave 4 SPX 1601, and wave 5 SPX 1616 so far. We are expecting this rally to end within the OEW 1628 pivot range for Minor wave 1 of the Intermediate wave v uptrend. Then after a Minor 2 pullback, Minor waves 3, 4 and 5 should complete the uptrend in either July or August. If it completes in July the SPX will probably make a double top at the 1680 or 1699 pivots. If it extends into August we can envision the SPX reaching the 1779 pivot. Currently medium term support is at the 1576 and 1552 pivots, with resistance at the 1614 and 1628 pivots.

SHORT TERM

Short term support is at SPX 1593-1599 and the 1576 pivot, with resistance at the 1614 and 1628 pivots. Short term momentum bounced from oversold Friday morning. The short term OEW charts ended the week negative with the reversal level SPX 1607.

After the SPX 1560 low on Monday the market rallied in what appears to be an incomplete five wave pattern for the rest of the week. We can count four waves completed: 1586-1573-1620-1601 with the fifth wave underway. The market was quite overbought on Thursday, after rallying 60 points off a positive divergence. The oversold condition on Friday should set up a negative divergence when the fifth wave concludes for Minor wave 1, possibly in the 1628 pivot range, next week. Minor wave 2′s, during this bull market, have been fairly steep pullbacks: 38.2% to 50%. Then the Minor waves 3, 4 and 5 should follow. Should the market drop below SPX 1586, however, the Intermediate wave iv downtrend would still be underway. Best to your trading!

FOREIGN MARKETS

The Asian markets were mostly higher on the week for a gain of 2.0%. No uptrend confirmations yet.

The European markets were also mostly higher on the week for a gain of 1.6%. No uptrend confirmations yet.

The Commodity equity group were all higher for a gain of 1.4%. No uptrend confirmation here either.

The DJ World index gained 1.3% on the week.

COMMODITIES

Bonds continue to downtrend and finished the week with a 0.1% loss.

Crude continues to uptrend and gained 2.8% on the week.

Gold is still downtrending losing 5.0% on the week.

The USD appears to be uptrending, gaining 1.0% on the week.

NEXT WEEK

Monday: ISM manufacturing and Construction spending at 10:00. Tuesday: Factory orders and monthly Auto sales. Wednesday: the ADP index, weekly Jobless claims, the Trade deficit and ISM services. Thursday: holiday. Friday: monthly Payrolls report with the Unemployment rate. As for the FED: Tuesday an open board meeting, then a speech by FED governor Powell at 5:45. Best to your weekend, week and holiday!

CHARTS: http://stockcharts.com/public/1269446/tenpp

http://caldaroew.spaces.live.com

After about 40 years of investing in the markets one learns that the markets are constantly changing, not only in price, but in what drives the markets. In the 1960s, the Nifty Fifty were the leaders of the stock market. In the 1970s, stock selection using Technical Analysis was important, as the market stayed with a trading range for the entire decade. In the 1980s, the market finally broke out of it doldrums, as the DOW broke through 1100 in 1982, and launched the greatest bull market on record. 

Sharing is an important aspect of a life. Over 100 people have joined our group, from all walks of life, covering twenty three countries across the globe. It's been the most fun I have ever had in the market. Sharing uncommon knowledge, with investors. In hope of aiding them in finding their financial independence.

Copyright © 2013 Tony Caldaro - All Rights Reserved 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 losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Tony Caldaro Archive

© 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