Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Consolidation Ahead

Stock-Markets / Stock Market 2021 Jun 01, 2021 - 12:18 PM GMT

By: Andre_Gratian

Stock-Markets

Current Position of the Market
SPX Long-term trend:  There is some evidence that we are still in the bull market which started in 2009 and which could continue into the first half of 2021 before major cycles take over, and it ends.  A move up to ~4500 is possible before the current bull market makes a final top and SPX corrects into its next major cycle low due in 2023.
SPX Intermediate trend:  Phase three (wave 5 from 3723) is now likely underway.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine 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 2-week trial period of daily comments, please let me know at anvi1962@cableone.net

Consolidation Ahead

Cycles:  Looking ahead!
7-yr cycle – Last lows: 2009-2016.  Next low: ~2023

Market Analysis (Charts, courtesy of QCharts)

IWM - SPX (weekly)
Structurally, IWM appears to run a little ahead of SPX.  Starting from the March low, IWM has already completed three waves up, while SPX is still in the final stages of doing so.  This is the reason for the “early warning” which is regularly given by IWM.  It is therefore likely that IWM will remain in a warning mode until SPX has completed wave 3, which may still be a couple of weeks away 



SPX daily chart
At the daily level, SPX is showing the deceleration pattern which precedes a minor top.  During the past two days, the index crawled to a fractional new high, but each day failed to retain its daily gain and pulled back at the end of the day.  This is better illustrated on the hourly chart which we will analyze next. 
This deceleration is caused by the imminent bottoming of an ~18-wk cycle expected to make its low next week. The index appears to have reached the end of 1 of 5, and the cycle would ideally bring about wave 2 of 5 since the amount of distribution established last week is not very substantial and the minor correction may not exceed the 4130 level.     
With the rally from the 4061 low, the oscillators have fully recovered from their negative readings and are strongly positive.  They are expected to remain positive while wave 5 from 3723 continues to unfold, and will warn us that it is about to end when negative divergence appears in the CCI.


SPX hourly chart
The SPX hourly chart provides a detailed, close-up view of its current structure, with wave 3 from 3723 having completed at 4238, and wave 4 also complete after making an a-b-c pattern down to 4061 before starting on wave 5. 
After the index had made a return move to 4213 by last Monday, the following action was a little murky since the expectation was that wave 1 of 5 had topped after reaching its ~4210 target and that wave 2 should now be causing a retracement; but the index refused to correct right away and instead made a little topping pattern which probably completed at Friday’s close.  If so, it would suggest that Tuesday morning should continue the expected pull-back into wave 2 with the assistance of the bottoming 18-wk cycle. 
We can only speculate beforehand on the impact that cycles and structure will have on the market, so let us see if we get the anticipated market action over the next week or so.  Also remaining to be proven will be the P&F projection which calls for wave 5 of 5 to top at 4310+
 

  • GDX (gold miners)-(dly)
  •  
  • If GDX can consolidate a little longer without going below 38, it could extend its rally to about 43. 
  •  
  • PAAS (Pan American Silver Corp-(dly)
  •  
  • PAAS also needs to consolidate a little longer without showing real weakness if it wants to reach 40 on its next move.  What GDX does will affect PAAS in a similar manner.
  •  
  •  
  • BNO (Brent oil fund) wkly
  •  
  • The weekly chart of BNO gives us a better appreciation of its price pattern.  The past 10 weeks have moved in a crawling uptrend which has barely exceeded the previous high.  The index is also struggling in an area of overhead resistance which will not be overcome with this kind of action.  The odds rather favor a pullback to the previous short-term support where a decision will be made about the future trend. 
  •  
  • UUP (dollar ETF) (wkly) ($USD chart is not available from this data provider)
  •  
  • UUP appears to want to hold at previous support or just a little lower.  Some good positive divergence is building in the CCI, but it still needs to do a lot of work to reverse its downtrend.  After breaking its 50-dma at a much higher level, it did manage to rally back up to it, but was immediately repelled.  It does not look as if much strength will be forthcoming unless it can overcome that MA. 
  •  
  •  
  • SUMMARY
  •  
  • Best guesstimate is that SPX has completed wave 1 of 5 from 3723 and that it is ready to embark on wave 2.  This will have to be confirmed by next week’s action.  Until proven otherwise, the index could still reach about 4310+ upon completion of wave 5.

Andre

Free trial subscription

With a trial subscription, you will have access to the same information that is given to paid subscribers, but for a limited time-period.   Over the years, I have developed an expertise in P&F charting (price projection), cycles (timing), EWT (structure), and general technical analysis which enables me to warn subscribers of pending reversals in market trends and how far that trend can potentially carry.  For a FREE 2-week trial, subscription options and payment plans, I encourage you to visit my website at 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

© 2005-2022 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