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The Market Oracle |
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By: Bob_Loukas
We're at the point in the equity bull market Cycle that every piece of news is construed as positive for the equity markets. In many cases, the news even appears to accentuate positive possibilities. The speculative nature of the current advance has by now captured the vast majority of market participants; the media and the pundits are no exception.
For example, the markets were pushed higher last week by several news events, even though the headlines hit the same themes that have been recycled for the past 3 years, and that are almost certainly, by now, fully discounted in prices. The news events included Japan calling off next year's planned sales tax increase, China surprising with an interest rate decrease, and the ECB announcing that they will be buying assets. These are all related to the tired narrative that central banks and related authorities can alter the natural long term pricing/valuation trajectory of the markets. The world's equity markets soared on the announcements, and in the process completely ignored the weak fundamentals that gave rise to them. The S&P and Dow even reached new all-time highs, in general very bullish developments. But in this case, the gains were built upon the shifting sand of sound bites rather than economic fundamentals.
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By: Ned_W_Schmidt
On morning of 17 November, while Western investors were sleeping, China opened the door to its investment world. On that day China began two way trading between the Shanghai and Hong Kong stock exchanges. This development essentially opened the Chinese stock market to investors around the world through Shanghai-Hong Kong Stock Connect. They said to investors around the world, "Welcome, just bring your money and come right in".
Investors would be well advised to be aware of the money flowing into the Chinese stock market, and possible ramifications of that money movement.
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By: Paul_Rejczak
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
By: Andre_Gratian
Current Position of the MarketSPX: Long-term trend - Bull Market
Intermediate trend - While everything technical points to an overbought condition which should require an adjustment, the exact timing of that correction is for the market itself to decide and reveal.
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 discusses the course of longer market trends.
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By: Toby_Connor
After two years of insane money printing designed to rescue its failing economy, Japan has now been rewarded with… another recession.
So what went wrong you ask? The same thing that always goes wrong when a central bank resorts to money printing to rescue an economy instead of allowing a cleansing period and a return to real productive growth. All they accomplished with their massive QE program was to spike inflation.
By: Money_Morning
Michael E. Lewitt writes: Stocks traded to new record highs last week on the back of new central bank initiatives to prop up struggling economies around the world. The People's Bank of China announced an unexpected cut in its benchmark lending and deposit rates for the first time since 2012. Hours later, ECB President Mario Draghi made another promise that his central bank would take new steps to bolster European growth and the ECB announced that it had begun buying back asset-backed securities.
By: Nadeem_Walayat
The stock market spent virtually the whole week giving the impression of levitating in thin air that increasingly convinced many with each passing day that the market would resolve to the downside. Instead the market surprised virtually all by doing what market trends tend to do most often which is to resolve in the direction of the primary trend, which for a bull market is UP.
By: Tony_Caldaro
Another good week for the market as new all time highs keep this uptrend rising. The market started the week at SPX 2040, rose to 2056 by Tuesday, pulled back to 2040 by Thursday, then rallied to 2071 on Friday. For the week the SPX/DOW were +1.10%, the NDX/NAZ were +0.55%, and the DJ World gained 0.90%. On the economic front it was a positive week. On the uptick: NY/Philly FED, the PPI, NAHB, building permits, existing home sales, leading indicators and the WLEI. On the downtick: industrial production, capacity utilization, housing starts, plus weekly jobless claims rose. Next week, a holiday shortened one, we get Q3 GDP, the Chicago PMI and reports on Housing.
By: Jack_Steiman
Futures were quiet early on in the evening last night. Out-of-the-blue the futures suddenly began a sharp, straight-up move. The culprit was more central bank stuff we're all used to by now. China decided to suddenly, and without warning, to cut interest rates by 40 bps. Europe saw their futures explode, and naturally, since we follow Germany overnight, we began to blast up. The futures rising steadily right in to the close. We gapped up and ran a bit higher. At the top today, we had daily RSI's on the key-index charts in the upper 70's. This is pretty much unsustainable. Add in all the froth prior to this explosion higher, and it seemed likely that the market would fade as the day moved along. That's exactly what happened. In this type of environment there is nothing more dangerous than chasing strength. Taking some exposure off isn't a bad idea at all.
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By: Clif_Droke
As several market technicians have pointed out recently, price oscillators and sentiment indicators for the U.S. stock market point to an excessively "overbought" condition, both technically and psychologically. To take just one instance of how overstretched the market has become, take a look at the following chart which shows the SPX in relation to its 200-day moving average. The 200-day MA is widely followed by small investors and big money managers alike.
By: Anthony_Cherniawski
Good Morning!
The Premarket has the SPX at the hourly Cycle Top resistance at 2071.62 this morning. If today’s Pivot is effective, we should see the SPX decline soon after the open. The Wave relationships suggest that SPX may top out at 2075.00, should Cycle Top resistance give way for a brief time.
Last night’s analysis of the VIX remains current. I just hadn’t enough information on the SPX to make the analysis until this morning.
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By: Austin_Galt
The Australian stock index, the ASX200, bounced nicely off its October lows while the last couple of weeks has given up some of those gains. So is this the start of a downtrend or just a correction before price heads up to new rally highs? I favour the latter.
Let's investigate beginning with the weekly chart.
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By: Anthony_Cherniawski
SPX is challenging the upper trendline of a probable Minute Wave [ii]. If correct, it may turn back down after the noon hour today.
By: GoldCore
The Ebola crisis has faded from headlines but remains a risk after the death of another Ebola patient in Nebraska and the death of a suspected victim in New York yesterday. This brings the number of confirmed deaths to two in the U.S. and possibly three if the New York victim is confirmed as having had Ebola.
The toll in the Ebola epidemic has risen to 5,420 deaths out of 15,145 cases in eight countries, the World Health Organization (WHO) said today. Transmission of the deadly virus still "intense and widespread" in Sierra Leone.
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By: Rambus_Chartology
There seems to be a lot of confusion out there as to whether the stock markets are bullish or bearish. Is the Dow Jones in a topping pattern as so many analysis are suggesting? I’ve seen some charts that are calling the big trading range , on the Dow Jones going all the way back to the 2000 bull market top, THE JAWS OF DEATH. Man it doesn’t get anymore dire than that. As usual I have a different take on the JAWS OF DEATH, which I would like to share with you tonight .
Before we look at the first chart for the Dow Jones I need you to clear your mind of everything related to the stock markets in any shape or form. That means no Elliot Wave counts, Time Cycles, Gann Lines , volume studies, no indicators of any kind. Clear your mind of every article you’ve ever read on the stock markets, bullish or bearish. And last of all, NO CHARTOLOGY. I want you to look at just the pure price action without any bias whatsoever. From that point we can then start to see what is really happening to the Dow Jones and related markets .
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By: Jack_Steiman
The market was anticipating something negative in those Fed minutes since a few of the Feds, who, by the way, are on their way out in 2015, were asking for rates to be raised sooner than later. Over the past month, or so, we've seen a few of them try to put pressure on Fed Yellen by stating their beliefs on what they think she should do, but she hasn't blinked. They stated their intentions in the minutes, but, once again, we didn't get any indication from Yellen that she's going to raise rates sooner than later, especially since in those minutes she talked about the slow improvement in housing, which is a key-economic indicator for her. She wasn't happy on that front, thus, on that alone we should expect her to keep rates low for a very, very long time.
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By: Anthony_Cherniawski
SPX has made a 5-wave impulse from the top and may be correcting up to 2048.00 as I write. The Orthodox Broadening Top trendline is at that level or a bit higher. An aggressive sell signal may be generated as SPX crosses beneath the trading channel trendline at 2040.00.
By: EWI
The following article was adapted with permission from the November 2014 issue of The Elliott Wave Financial Forecast, a publication from Elliott Wave International, the world's largest market forecasting firm. Follow this link for the complete article.
Here's a key principle concerning the role of government in bull and bear markets, as outlined in The Elliott Wave Theorist in 1991:
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By: Jesse
"We are still amazed by the chart [below], but it summarises the problem for those seeking to short stocks with fundamental weaknesses. In the last three years, the MSCI World Index has risen by 38% (11% per annum) whilst reported profits have risen by just 3% (that’s just 1% per annum!). As the events of last month attest, central bank actions–not profits–are driving equities forward." - Andrew Lapthorne, Societe General
By: Ed_Carlson
With the October rally exceeding the September high we find ourselves once again searching for the right shoulder high which will mark the end of the bull market.
The rally from the end of the Sideways Movement on 11/25/11 terminated at the July high earlier this year when, after 964 calendar days, the Dow had come to the end of the longest of Lindsay's standard time spans and dropped 770 points. We know from the preserved, written work of George Lindsay that a right shoulder always follows a long basic advance. While a right shoulder is usually lower than the high of the basic advance, Lindsay left open the possibility that a higher right shoulder is possible and history shows that it is not without precedent.
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