econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 31 January 2016

Stock Market Continues Test Of Critical Support Level

by Erik McCurdy, Prometheus Market Insight

Chart analysis is one of the most widely misunderstood forms of financial market forecasting. It has been around for centuries, and Charles Dow, the founder of The Wall Street Journal and creator of the Dow Jones Industrial Average, was the first prominent chart analyst in North America during the late 19th century.

chart.analysis.380x188

Dow realized that financial market behavior is a reflection of both rational data, such as economic activity and earnings growth, and irrational human emotions, such as greed and fear. In order to develop reliable forecasts for future market behavior, it is necessary to understand and analyze both the rational and the irrational drivers of market prices, and the thoughtful application of chart analysis provides the ability to do precisely that.

For seven months, the stock market has been exhibiting signs of weakness and signaling the likely termination of the speculative cyclical bull market that began in 2009. Last weekend, we noted that the developing cyclical top in the stock market had entered an important phase. The massive distribution pattern that has been forming since 2014 indicates that the bull market likely terminated in July of last year and a weekly close well below critical congestion support in the 1,880 area on the S&P 500 index would essentially confirm the start of a new bear market and forecast substantial losses.

spx.2016.jan.29

One week ago, our computer models identified the potential formation of an intermediate-term low in the stock market, and this week a cycle low signal was nearly generated, confirming that a new intermediate-term cycle has begun.

spx.2016.jan.29.2

The intermediate-term cycle has had a bearish translation since May of last year, so it is likely that the rally from last week will terminate sometime during the next three weeks. From a short-term perspective, the initial rally of the current cycle is seven sessions old and it has struggled to advance following the violent reversal on January 20. The latest alpha high (AH) will likely form sometime during the next 3 sessions, after which the forthcoming alpha phase decline will likely return to recent lows.

spx.2016.jan.29.3

As we often note, a long-term reversal in the stock market is a process, not an event. Since June of last year, market behavior has signaled the likely formation of a long overdue cyclical top, and we are now on the brink of a breakdown that would confirm the start of a bear market and forecast substantial losses during the next 12 to 18 months. Therefore, it will be important to monitor market behavior closely during the next several weeks.


Author's note: We will identify the key developments as they occur in our daily market forecasts and signal notifications available to paid subscribers. To receive our market forecasts and signals, login and then upgrade to a paid subscription.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Consumers Carry Weak GDP Number Out of the Red
The Theory of the Monetary Circuit: A Critique
News Blog
What Are British People Most Proud Of
Trust In Mass Media Erodes
Shimon Peres Was An Israeli Nationalist First And A Peacemaker Second
Guessing Game: Valuations Of Trump's Fortune
What We Read Today 29 September 2016
This Mushroom Starts Killing You Before You Even Realize It
August 2016 Median Household Income Has Declined From The Beginning Of The Year
August 2016 Pending Home Sales Index Declines?
24 September 2016 Initial Unemployment Claims: Rolling Averages Continue to Improve.
Third Estimate 2Q2016 GDP Revised Upward. Corporate Profits Down.
The Terrorist Networks At Our Fingertips
Infographic Of The Day: Dubai Interesting Statistics And Facts
Early Headlines: Asia Stocks Up, Oil Surges, OPEC Cuts Production, Student Loan Woes Mount, Trump Still Close, Aleppo Hospitals Bombed, Huge Wind Storm In Oz And More
Investing Blog
Are You A Trader Or Investor?
Investing.com Technical Summary 29 September 2016
Opinion Blog
First: 'Over-Population End-of Times' Now: 'Shrinking Population Disaster'
The Federal Reserve Note
Precious Metals Blog
Where Silver Prices Are Headed Now After Fed's Latest Inaction
Live Markets
29Sep2016 Market Close: Wall Street Bracing For Major Turn Down If German Bank Fails, Crude Prices Rise Towards 50 Handle And US Dollar Showing New Strength
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved