Dow Stock Market 2022 Trend Pattern
Stock-Markets / Stock Market 2022 Jul 17, 2022 - 06:51 PM GMTBy: Nadeem_Walayat
Dear Reader
This is brief stock market update as I seek to complete my extensive analysis of the US Housing Market which the following contents list indicates extent of -
US House Prices Trend Forecast 2022 to 2025
The stock market bounce fizzled out at 4180, thus no break above 4200 to target a trend to 4290 let alone anything higher and one does not need to look far for the culprit. CPLIE of 8.6% as the consensus and likely the FED had convinced themselves to expect inflation to have peaked hence triggering a whiff of panic as to what the Fed will do next to combat inflation.
My stock market big picture remains to expect the Dow to target a trend towards a probable bottom by late August / Early September at approx Dow 29,600 So far the stock market has not done anything to negate this scenario and thus remains the direction of travel ahead of my next stock market in-depth analysis. With the Dow closing Friday at 31,393 which is 1800 points / 6% of away from target which implies that the current sell off should terminate some points above 29,600 to resolve in a summer rally ahead of the target low.
Again looking at the more popular S&P index (as requested by Patrons) the unfolding pattern suggests that the S&P is targeting a trend to first support zone of 3875 to 3825 that will likely break given that we are in a bear market to target a trend to a new bear market low of 3730 before embarking on the next bear market rally that will once more resolve in a trend lower to target 3600 by Mid August to early September for the target bear market low. Though note the target low does not mean the FINAL LOW, as I expect what will follow the LOW will be a base building exercise that will likely see several false spikes to new bear market lows. as a volatile trading range that will seek to confuse investors most of whom will become convinced by the CRASH is coming brigade that the fundamental picture had become so bad that a BIG CRASH was inevitable and thus many will throw in the towel near the bottom, perhaps on one of the trading range rallies to SELL just before the stock market enters into an inexplicable powerful bull run into the end of the year after having shaken off many weak hands during a couple of months of chaos that will leave many desperate for another sell off back to the lows so that they can have another chance at buying at the bottom, after all that had been the stock market pattern for the preceding 10 months. Thus Whilst 29,600 is the target low however it will it have to break several times during the subsequent trading range to create the necessary conditions for the subsequent bull run though as per my last in-depth stocks analysis of Mid September 2021(Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast Sept 2021 to May 2022), the presidential cycle suggests that the Dow will end down for the year.
(17th Sept 2021) As for 2022, January could mark the start of a significant correction that resolves in a weak trend higher into Late April for either a double top or even a lower top ahead of a more serious decline during the remainder of 2022.
My next in-deph stock market analysis that will conclude in a new detailed trend forecast into 2023, but for the time being we are meandering towards Dow 29,600 by late August 2022 which will be followed by a volatile trading range that could extend into the end of October and so here's a Dow chart that roughly illustrates the price pattern I have in mind that is PENDING in-depth analysis.
Chinese Stocks Bottom!
Chinese stocks are finally showing signs of having bottomed! So what not to do is to start bailing on 20% and 30% run ups! That's what weak hands do! But instead take a breakout above on say BABA $140 as a sign for the start of a multi-year bull run towards NEW ALL TIME HIGHS.
Alibaba $110, PE 19, EGF -12%, EGF12M 48%. Implies strong future earnings growth which will lower multiples and inflate the stock price.
For\get technical analysis, fundamentals, investing all boils down to investor psychology. Here's a test. If you are invested in BABA and say you have a 30% draw down (as do I) then how do you perceive your BABA holding?
Are you eager to get out at a smaller loss or even break even? Or did you throw in the towel as Charlie Munger did by selling half his BABA stake at a loss at around $100.
Me? I'm holding for $600 which means all of those who have been weeping over a 30% draw down in BABA or worse SOLD near the bottom don't understand stock market investing, Most will SELL near the bottom because that is when the FEAR is at it's worst! For instance in March 2009 the masses had been convinced that we were heading for a re-run of the 1930's, so who in their right mind would be buying stocks that were heading towards ZERO! Not many did, nor would they for the next 5 to 10 years! Only to FOMO towards the tail end of the last bull market.
This is what it's like at market bottoms, most have had enough and given up and are eager to get out as soon as they can on any rally off the low.
This analysis Dow 2022 Stock Market Trend Pattern was first made available to Patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.
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And lastly warning of a NEW Stable coin ponzi scheme ready to suck in your hard earned wealth hot on the heels of the Terra Luna crypto scam stable coin that did it's rug pull early May that within days was followed by the USDD scam stable coin that purportedly has already sucked in $720mln dollars by offering suckered a 30% APY interest rate. Don't be fools! Nothing pays you 30% APY! Only scam turd coins like USDD
The bottom line is that stable coins are a crypto SCAM factory, as soon as one rug pulls another one pops up, probably operated by the scam artists.
This is why crypto's will be regulated because the stable coins are a SCAM FACTORY that I have been warning of for well over a YEAR!
YOU HAVE BEEN WARNED!
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Your buy the dip analyst.
By Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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