BROAD STOCK MARKET UPDATE (11:30 pm EST)
It is late in the medium-term cycles of all three broad stock market indices (DOW, S&P 500, NASDAQ), which began with the lows on Nov. 20 and Nov. 21. It appears that the final tops in the S&P 500 and NASDAQ were on Jan. 28, while the DOW's final top came on Feb. 10. This was a strong intermarket bearish divergence signal, and all three indices have now fallen below their 45-day and 15-day moving averages. It is also late in a longer-term 1-year cycle whose final bottom is also now due.
Yesterday's isolated lows COULD be the final bottoms to all these cycles (they were inside a strong reversal zone), but the target for the 1-year cycle bottom should be lower (closer to 46,000 in the DOW and 6,500 in the S&P 500). There is another strong general reversal zone coming up March 17 - 26. If the market moves lower into that time frame and doesn't fall too far below these target prices, we may have a good spot to buy for more rallying into the summer - possibly to new all-time highs. On the other hand, if these indices break well below 45,500 in the DOW and 6,500 in the S&P 500, our outlook would not be so bullish. In that case, a serious long-term correction could be underway. For now, I am remaining on the sidelines of this market.
It is late in the medium-term cycles of all three broad stock market indices (DOW, S&P 500, NASDAQ), which began with the lows on Nov. 20 and Nov. 21. It appears that the final tops in the S&P 500 and NASDAQ were on Jan. 28, while the DOW's final top came on Feb. 10. This was a strong intermarket bearish divergence signal, and all three indices have now fallen below their 45-day and 15-day moving averages. It is also late in a longer-term 1-year cycle whose final bottom is also now due.
Yesterday's isolated lows COULD be the final bottoms to all these cycles (they were inside a strong reversal zone), but the target for the 1-year cycle bottom should be lower (closer to 46,000 in the DOW and 6,500 in the S&P 500). There is another strong general reversal zone coming up March 17 - 26. If the market moves lower into that time frame and doesn't fall too far below these target prices, we may have a good spot to buy for more rallying into the summer - possibly to new all-time highs. On the other hand, if these indices break well below 45,500 in the DOW and 6,500 in the S&P 500, our outlook would not be so bullish. In that case, a serious long-term correction could be underway. For now, I am remaining on the sidelines of this market.
RSS Feed