Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Focus on Stock Market Short-term Cycle

Stock-Markets / Stock Market 2021 Sep 21, 2021 - 09:14 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 until major cycles take over, and it ends.  The 4550 projection which had been in effect since the March 2020 low has now been reached, but there is still no sign of a major top.

SPX Intermediate trend:  A Short-term SPX correction is 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 agratianj@gmail.com

 

Focus on the Short-term Cycle

Cycles:  Looking ahead!

7-yr cycle – Last lows: 2009-2016.  Next low:  ~2023

Market Analysis (Charts, courtesy of StockCharts)

DJA daily

Here is another perspective on the market:  while the SPX and NDX have continued to make new highs, the Dow Jones complex (industrials, Transports, utilities) has been going sideways since May.  Is it simply consolidating at the intermediate level, or making a major top?  This is not a question that can be answered at this time, but if this index makes a new low, we may have our answer.  


The individual components are charted separately below.  The transportation index, which has been severely affected by the pandemic has been the weak sister, but the other two may be showing an inclination to follow it.  The TRAN is already making new lows, a response to a resurgence of virus infections, while the UTIL is becoming concerned with a possible recurrence of inflation.  The latter is also affecting the INDU.


SPX daily chart

In the previous report I mentioned that the short-term cycle – probably an expression of the Hurst 80-day cycle – which had been beating visibly and regularly on the daily SPX chart was likely to have its weakest showing since May.  This was confirmed last week since it has already made the more complex correction from that date and probably has a couple more days to go which, according to the SPX P&F chart, could extend the decline down to ~4380.

If so, this pullback would already give us the largest correction since May.  But if the next short-term cycle fails to make a new all-time high, we would then be liable to make a correction which is at least as important as that made from September to November of last year; and that could set up the index for a final run into a major high which could become unchallenged until after the 7-year cycle has made its low. 

In the last letter, I suggested that following the gyrations of the short-term cycle could be as good an analytic strategy as any to determine how much weakness lies ahead.  If you look at the chart below you will note that since last May the short-term cycle exhibited a right-translation pattern, until the current one when the cycle top occurred precisely halfway through its span.  That was a warning that the next short-term correction would be longer and probably deeper than anything since May.  In addition, if we do have more downside directly ahead, it will be the first time since March that SPX has been able to trade below its 50-dma!

Does this mean that the bullish trend which started in March 2020 is starting to weaken; that an important shift is taking place in the buying/selling ratio?  Yes, but we still do not know for how long and to what degree.  It will take a little longer before we know if this will lead to the end of the bull market, or simply to one more intermediate consolidation/correction before the final top.

  •  
  • SPX hourly chart
  •  
  • Once again, the 60-m chart below encompasses the full span of the short-term cycle to date, and it is deemed to continue for another 1-3 days before it is complete. As stated in last week’s letter, the time when the short-term cycle will be able to extend the end of its phase below its beginning price will be significant since it could be tantamount to the first time since March 2020 that a short-term low was exceeded on the downside.  The most basic definition of an uptrend is that it consists of a series of higher highs and higher lows.  When that pattern is broken by a lower high followed by a lower low, the trend is considered to have reversed.   
  •  
  • The current cycle has taken SPX to the new all-time high of 4546, and it is unlikely that the current cycle low will exceed its current beginning phase low of 4368.  We can therefore conclude that, at this time, there is no immediate threat of the bull market topping out; but, as we know, the longest journey begins with a small step!  Consequently, we’ll see if the next short-term cycle -- probably due to make its appearance next week -- will turn out to be the next step!
  •  
  •  
  • USD (dollar) dly
  •  
  • The dollar briefly retraced its uptrend but found support on the 50-dma and is attempting to resume it.  It’s not certain that the correction is over, and it will take a few more days before this is confirmed. 
  •  
  •  
  • GDX (gold miners) (dly)
  •  
  • GDX may be resuming its downtrend.  It failed to make a new high and quickly sold off to a new low.  Should it fail to find support quickly, the next target would be 28.50-29.00.
  •  
  • PAAS (dly)
  •  
  • PAAS has also sold off after failing to overcome its downtrend line and the 200-dma combined.  It has not yet made a new low and we’ll have to see if there is some follow through to the selling.  A move above the trend line would be an important bullish statement.
  •  
  •  
  • BNO (Brent oil fund) dly
  •  
  • BNO twice neutralized a break below the 50-dma.  Also, the pullback was in three phases which characterizes it as a correction.  It may now be on the way to 22 before finding sellers.
  •  
  • SUMMARY
  •  
  • Some developing market weakness is apparent in the current phase of the short-term cycle, but it does not seem to be anything to be particularly concerned about at this time. 
  •  

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

© 2005-2019 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