Category Archives: Stock Indices

The DOW Index Cycle Location 01/25/2019

The financials were the first group to report earnings, then it followed by the semiconductor stocks.  The market responded positively to both groups, except for some losers due to their company specific issues in each group.  The financials and semiconductors were the laggers since early 2018, now they have turned into market leaders.

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A Furious Bear Market Rally

We just witnessed a furious bear market rally in 16 trading days.  The DOW rallied 14% in 16 trading days but it failed to produce a weekly reversal signal in the maximum allowed time length of 3 weeks against the December low.  The weekly reversal signal is needed to enable the market to continue to move up from here.

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S&P 500 Cash Index Cycle Location 01042019

The S&P 500 violated the February 2018 intradeday low on Friday 01/04/2019.  It has the entered the resistance zone at 2532-2600.  From the way how it bounced from the Christmas Eve low we believe it has potential to go a slightly higher than the lower end of the resistance zone of 2532.

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2019 Outlook and Strategies

All three indices closed at year end below the yearly pivot range, indicating a weak position entering 2019.  Pivot range is calculated based on the high, low and close of a trading period.  The pivot range identifies an area that is called the meat of the market where the market is likely to find support,

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We Are Closer to a Short Term Bottom

The recent selloff has been absolutely brutal.  The market has gone into a sharp selloff that is very similar to the previous selloff in velocity and magnitude in October 2007.  From 10/12/2007 to 1/25/2008 during a 15-week period, the S&P 500 declined from 1576 to 1270, a 19.41% decline.

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