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
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stocks Trending Higher on Better than Expected Economic Statistics

Stock-Markets / US Stock Markets May 04, 2008 - 05:38 PM GMT

By: Andre_Gratian


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 - The intermediate consolidation came to an end on 3/17. The index is now in a cautious uptrend which probably has a little farther to go.

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 .


In his weekly letter, Louis Navellier gave a good account of the current market mood:

"Investors pushed stock prices higher this week after several economic reports indicated the economy is soft, but not nearly as bad as many feared... Investors are sensing the worst is behind us. And since history suggests the stock market tends to turn higher about four months before the economy, buying pressure is coming back into the market place."

The technical aspect of the market is also reflecting "cautious" optimism on the part of investors. Prices continue to move up but without much conviction. This is reflected in the advance/decline and volume figures which are fairly anemic but remain positive on balance. This type of technical pattern normally suggest that a correction is near and keeps the analyst on tender hooks.

Mike Burk, in his "Technical Market report" which is available on "The Market Oracle " provides us with excellent statistics about volume, new highs and new lows. He notes that in the past few weeks, the volume and the number of new highs has been falling steadily while prices have been rising. This confirms the pattern which is apparent in the A/D, and suggests that this rally is on borrowed time. He also notes that the Money supply has been falling sharply... not a positive sign.

I have a theory that may explain this sluggishness. The Hurst 9-mo cycle was ideally supposed to make its low next week (38 weeks from the 4.5yr cycle in August), and I have been expecting a pull-back into that time frame. This has not happened! Could it be that the bottoming cycle does not have enough downward pressure to reverse prices, but is merely applying the brakes on the uptrend? It's effects would then be reflected in the poor quality of A/D and volume in the past few weeks. It also means that after next week, its upward pressure would allow the markets to perform better. We'll soon find out if this theory is valid. In the meantime, if this pattern continues, caution is advised.

What's ahead?

Chart pattern and momentum:

There are a few positives on this chart. The index made a new high last week and, in doing so, it finally surpassed, in a convincing way, the red horizontal line which represents the high of the January rally to 1396. At the same time, it broke out of downtrend line B which goes back to the October top. However, this is a trend line of dubious validity since it is drawn across only two points. Trend line A touched three points and was more predictive of a trend change when it was broken.

There are also several negatives: For the past month, the A/D indicator has been making lower highs on each short rally. This means that fewer and fewer stocks are participating. However, it also has a pattern of higher lows, which implies that while buyers have been more and more reluctant to step in, the sellers have not yet been able to take control of the trend.

Another negative is that the momentum indicator has been trading in the overbought zone for a couple of weeks. There is no time limit on how long it can stay there, but the lack of enthusiasm in breadth support tells us that it won't be for much longer, unless the A/D pattern improves.

Note that the price is drawing close to the red dashed line. I believe that this represents the down channel from October. Quite often, prices tend to rise to a point just outside such a channel before correcting. The blue vertical line (which will be explained under "Cycles") may represent the approximate time when this will take place.

A little different perspective can be drawn from looking at the weekly chart. Both indicators are still trending up and not overbought. In fact, the higher one (MACD) is still oversold and its histogram still rising. Under "projections" I will discuss target levels for this rally. They correspond approximately with the lower part of the long-term trend line which would offer strong resistance if prices move up to it.

For the QQQQ, the same trend line resistance would come at about 50.00.


Where is the 9-mo cycle? It is probably either going to be a non-event or will bottom late. It would not be the first time that the Hurst 9-mo cycle has had little effect on the market. I have proposed a theory ("Overview"), but only the future will tell us if it is valid.

There appears to be a fairly consistent 35 trading-day rhythm in the market, plus or minus a couple of days. This is represented on the chart by light blue vertical lines. It is more likely to be a CIT (change in trend) phenomenon than a true cycle. Since the end of its present phase is fast approaching, it's very possible that next week will be the top of this rally.

Adding to this possibility is the fact that some short-term cycles are due at the end of next week.


There are 3 potential SPX projections to the upside for the end of the rally. The first was 1423 and was reached on Friday. There was an intra-day pull-back after that projection was reached, but nothing serious so far. The divergences are there, but we'll have to wait until Monday to see whether this turns out to be something more significant.

By reaching that level, the SPX had to go decisively beyond 1396, which it had resisted doing until last week. This triggers two other potential projections to higher levels: 1438 and 1470. At a maximum, if internals improve, the index could reach 1480.

The overbought condition of the market and the poor performance of the A/D, volume, etc... imply that we could have a reversal at any time to relieve the unsupported price excess. The higher levels, if reached, could well be the top of the intermediate trend which started at 1257. The indices could then face a decline into the Fall, where the 1,2,3 and 6 year cycles are due to make their lows.


Breadth continues to limp upward. The A/D oscillator that is shown on the chart above plainly demonstrates the loss of momentum of that index. However, it has remained positive and that has allowed the McClellan Summation index to continue improving, albeit only slightly, but enough to finally turn it positive. (Chart below courtesy of StockCharts)

The MACD of daily A/D, which is the indicator shown above, and which is very similar to the McClellan oscillator, is providing a sharp contrast to the momentum oscillator, which is overbought. This is not a good technical picture. It is negative, and should not lead to a continued extension of this rally for very long without a correction setting in.

The new highs/new lows indicator is telling the same story.

Market Leaders and Sentiment

In the last letter, I asked "Which are we to believe, GE or the NDX?". The answer is: "Perhaps both!"

GE has done very little since its dramatic decline of a few weeks ago. It looks as if it requires more consolidation and basing action before it will be in a position to begin another intermediate term rally.

On the other hand, the NDX has been leading the SPX higher in this rally. Until this stops, it is likely that the short-term trend will continue to be up.

So, perhaps the NDX is telling us that there is a little more to the rally, but GE says that more consolidation will be needed before we can mount another assault on the highs.

Considering the fact that there are some important cycles bottoming in the Fall, I would say that this is probably a fair assessment of what lies ahead.


By rising above its 2/1 high of 1396, the SPX has triggered some higher projections. These could mark the target for the current rally as well as the end of this intermediate term rally from 1257. Another period of consolidation would then be required into the Fall to satisfy the longer cycles bottoming in that time period.

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… Please rest assured that I shall continue to be with Turning Points for a long time 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 .

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