Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Corrective Rally is over as the Stock Markets tumble on more Subprime bad news

Stock-Markets / Global Stock Markets Mar 13, 2007 - 10:32 PM GMT

By: Nadeem_Walayat

Stock-Markets

More subprime bad news hit the Dow as it closed down 242 points at 12,075, dragging the FTSE lower to 6161, which had earlier in the day rallied strongly to 6276. The sell off had started in Asia with many indices down between .5% and 1%.

The continuing, and one could say expected bad news from the US Housing market was from the US Mortgage Bankers' Association survey which showed that 0.54% of all loans began the foreclosure process in Q4 of 2006, the highest in the organisation's 37 year history of recording such statistics. This news again raised the strong possibility of the US going into recession later this year.


The market price action for both the Dow Jones and the FTSE 100 Index has been somewhat weaker than expected following the sell off that started on 27th February 2007. In the the article of 27th February (Stock Markets follow China Lower - What to expect next as China's crash continues in Asia) , the anticipation was for lows to be made, and for a rally that would retrace 50% of the decline from the subsquent lows, these targets were initially expressed as 12525 for the Dow Jones and 6,300 for the FTSE 100 Index.

FTSE 100 Index Outlook
The FTSE peaked at 6276 earlier Tuesday 13th March, which fulfilled its target for the corrective rally, having rallied by more than 50% from the recent low of 5990. The clear initial target for the FTSE is the 5990 Low, which would represent a decline of some 170 points from the last close.

However, at this point further downside below the 6000 level appears limited, with very heavy support in the region 5900 to 6000. This suggests that despite the negative chart picture in the price action to 6000. That the FTSE could just hold the 6000 level and bounce .Should 6000 break (5990), then the outlook is probably for drifting action in the region 5900 6000, during which the future prospects for the FTSE will become clearer.

In Summary - FTSE 100 is targeting 6000, there is a strong probability of the FTSE holding 6000 (5990 low). Further downside appears limited in the immediate down swing.

Dow Jones Indst Av. Outlook
The corrective rally proved weaker than expected, failing to retrace 50% of the decline towards 12,420. Therefore this suggests that unlike for the FTSE 100 Index, the low of 12,040 should be breached, especially given that Tuesdays decline has already placed the Dow Jones within striking distance of this target.

So I am assuming that the low of 12,040 will be breached, therefore the Dow Jones is targeting a decline to between 11,650 and 11,750 as per the analysis of 27th Feb 07. Immediate support lies at 12,000, which given the relative weakness does not look as though it will be of much benefit.

In Summary - Dow Jones is targeting a down swing to between 11,650 and 11,750.

By Nadeem Walayat,
Editor of The Market Oracle.
Copyright © MarketOracle.co.uk 2007

The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk


© 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