Current Position of the Market
SPX: Very Long-term trend – The very-long-term cycles are down and, if they make their lows when expected (after this bull market is over) there will be another steep and prolonged decline into late 2014. It is probable, however, that the steep correction of 2007-2009 will have curtailed the full downward pressure potential of the 120-yr cycle.
SPX: Intermediate trend – SPX has made a top at 1474. A mid-correction rally is underway.
Last week’s newsletter discussed the probability of a mid-correction rally starting from the 1335-1341 level, the possibility that a short-term low had already been reached at 1343, and that a reversal had already started. The forecast turned out to be correct, but the mid-correction rally is even stronger than anticipated. I had an initial phase projection of 1403, but on Friday SPX closed at 1409. Although Friday’s momentum could spill over into Monday, SPX is giving indications of having completed this phase of the rally and is ready to start a retracement. I have already mentioned that the reason for this pull-back would be the cycles that are due to bottom at the end of the month and that which are likely to produce a retracement of about 50% of the move from 1343. This is reinforced by the fact that this would be a retracement down to the level of the 4th wave of the 5-wave move which ostensibly just ended. For SPX, this would take prices back down to about 1377.
A reason for the rally to end at Friday’s high is that it represents a 50% retracement of the entire decline from SPX 1474. DJIA has retraced slightly less than 50%, while NDX has only retraced slightly more than .382 which still makes it the weakest of the three indices.
Following the near-term correction into the end of the month, a resumption of the rally is likely with marginal new highs anticipated, perhaps extending to .618 of the decline from 1474. That would bring SPX to about 1424. Upon completion of this move, the intermediate decline could then continue into the original forecast time slot of early 2013.
I have given a forecast of what could happen over the next few weeks based on cycles and Fibonacci projections that seem logical. Let’s see how accurate this scenario will turn out to be.
In last week’s newsletter, I also mentioned that AAPL had most likely reached a near-term low in a climactic fashion. That also proved to be correct. By Friday’s close, the stock had tacked on another 42 points…………………………….
full article at source:http://www.marketoracle.co.uk/Article37719.html
- Market Turning Points (safehaven.com)
- Bad Prospects for Extension of Stock Market Rally (thepressnet.com)
- S&P 500 Index (INDEXSP:.INX) Likely To Pullback Further In The Days Ahead (etfdailynews.com)