The strong SPX drop on 08/02/23 could be the begining of a bear phase into October 2023. Daily RSI ON 08/02/23 reached 53.81 which is below the RSI reading made on 06/26/23 of 66.93. This forecasts an SPX move down to that area which is near a Fibonacci .236 retracement of the October 2022 to July 2023 rally. If the SPX reaches this zone it could be just a...
There’s a common misconception that when the VIX is making a new low its bearish for the S&P 500 (SPX). The belief is that the VIX making a new low represents excessive optimism and should be viewed as a contrary indicator. However, many times the SPX makes important peaks after the VIX has bottomed out. The VIX is derived from Put/Call trading. A higher...
Since 04/25/23 the Nasdaq Composite (IXIC) has been leading the way up. Its gain from 04/25/23 to 07/19/23 was 22%. The S&P 500 gain over that time was 12%. The Dow Jones Industrial Average 5%. Now IXIC is leading the way down. Note on the 07/19/23 peak the bearish divergence on both MACD and RSI. MACD also has a bearish lines cross, while RSI has moved...
My 06/25/23 post noted that Alphabet (GOOG) could rally above the peak at 129.55 and top somewhere in the low 130 area. GOOG rallied but has since had a sharp reversal. MACD has a bearish lines cross and RSI has crossed below its moving average line. A break below 115.83 could open the door for a move down to the 90 area.
Some basic tips on discovering trend changes using Point & Figure (PF) charts in conjunction with MACD and trendlines. PF charts concentrate on price movements; therefore, the PF chart scale is smaller than when using Bar charts. For example, the SPX chart illustrated covers a period of three years. On a Bar chart weekly scale would be appropriate. With PF...
The SPX has rallied to the upper boundry of a Point & Figure price cluster. The cluster consists of four columns and two rows. If the SPX can break above the cluster it opens the door to more upside action. We could find out in one or two trading days if the resistance can be broken. If an SPX top is made near the 07/19/23 peak the next decline could countinue...
In my December 2018 SPX posts on this site I noted a comparison between the SPX 2018 bear phase with the SPX 1998 bear phase. This comparison helped me forecast a significant SPX bottom due in late 2018 or early 2019. Now there's an even more precise comparison between the 2018 to 2020 SPX bull market and the October 2022 to June 2023 SPX bull phase. The 2018...
The SPX appears to have completed a post Horizontal Triangle thrust up from the 05/04/23 bottom. Bearish divergences on the daily RSI and MACD support this theory. Broader seasonal patterns are bearish for stocks into October. There are several Fibonacci time cycles pointing to a significant SPX top late June to early July 2023. One of these time cycles will be...
The Russell 2000 (RUT) from its high in November 2021 has a fascinating Elliott wave pattern. The November 2021 to June 2022 is a Double Zigzag. From June 2022 to the present it appears the RUT is forming a Horizontal Triangle which is a sideways correction pattern. If correct, the pattern could complete sometime next week in the area of 1920 to 1975. If it...
Alphabet Inc (GOOG) recently retraced a Fibonacci .382 of the recent impulse wave up - labeled "iii" - boxed. Also note the drop subdivided into a clear Elliott wave (a) - (b) - (c) Zigzag. Daily Stochastic had a bullish lines cross after going into the oversold zone. There's a high probability GOOG could rally next week into the 131.00 to 134.50 area. If this...
More evidence that U.S. stocks could soon begin a significant drop lower comes from the Regional Bank - ETF (KRE). KRE made a new bear market low on 05/04/23 and has recently rallied to just below a Fibonacci .236 retracement of its 2022 to 2023 bear move. Daily RSI and MACD have bear crosses. KRE has a very good chance of dropping back to the 05/04/23 bear...
Consumer staples fund (XLP) is composed of stocks from some of the largest and most stable U.S.. companies. At times it can outperform the SPX, in 2022 It peaked more than three months after the SPX. Recently the XLP has underperformed the SPX by a wide margin. This could be a bearish omen for the entire U.S. stock market.
Currently the Nasdaq Composite is the strongest of the three main U.S. stock indices. On 05/26/23 the Nasdaq Composite made a new post October 2022 rally high. The Dow Jones Industial Average failed by a wide margin. The S&P 500 came close to a new high but missed by 4 - ticks. The Nasdaq 100 is stronger than the Nasdaq Composite, and on 05/26/23 was just...
A "Rule of the Majority Signal" occurs when one of the three main U.S. stock indices; SPX, IXIC, and DJI, makes a new high/low unaccompanied by the other two indices. The new trend of the U.S. stock market is with the two non confirming indices. There was a bearish Rule of the Majority signal on 05/22/23 when only IXIC made a new post October 2022 high. On...
Last week there was a rare VIX topping Signal. This happens when the SPX makes a new rally high while the VIX makes a lower bottom. The last time this happened was in August 2022. Prior to then there was a VIX topping signal in January 2022. If the SPX drops next week it could be the start of adeep multi-month bear phase.
Last week there was a rare VIX topping signal vs. the SPX. This happens when the SPX makes a new rally high while the VIX fails to make a new decline low. This signal occurs only one or two times a year. The last occurence was at the SPX mid - August 2022. Prior to August 2022 there was a VIX topping signal in January 2022. If the SPX declines next week it...
Attention this is a RED ALERT! On 05/16/23 the Nasdaq Composite (IXIC) appears to have completed an Elliott wave Ending Diagonal Triangle. If so this could be the final wave up of the rally that began in October 2022. On 05/16/23 the IXIC advance/decline line was bearish. 15 -minute MACD and RSI have significant bearish divergences. May is the start of a...
The seasonal bearish period for stocks is from May to October. The Nasdaq 100 and Nasdaq Composite have continued to make rally highs but the S&P 500 and Dow Jones Industrial Average have not. This is a very broad based bearish divergence. Focusing just on the NDQ shows it has bearish divergences on the RSI, MACD, and KST. NDQ has reached a top zone...