Waiting for the Fed...long day ahead

While waiting for the decision ahead - LONG day - there has been a lot of coverage of the decline since October.  So where is the market?

Is it the start of a long term (Primary) bear market?

Is it a short term correction? (secondary movement - counter Primary trend)

Each Primary trend (up or down) has 3 stages

1. Accumulation (Bull)  Distribution (Bear)

2. Large move

3. Exuberance (Bull) or despair (Bear)

Just going to look at the change from Bull to Bear as the market has been rallying since 2008 

Looking at DOW (headline index) - up over 300% since 2008

The chart shows the (possible 3 stages)

So now it may be the start of the BEAR -

Probably seen or seeing stage 1

1 Distribution

• Smart money notices changes in business climate and start selling stocks
• Public still heavily involved and buying stocks (this is when the man on the street starts giving advice on buying stocks)
• However smart money tends to be larger and stocks start to fall
• Rallies will be strong and give confidence to bulls that the bull market is still strong
• however the rally should not exceed the previous high

Chart show monthly Dow Industrial

The high in February 2018 looks like the exuberance by the public

Reaction high in September looks like the resumption of the bull market ( all forecasts were for new highs and Dow targets of 30,000)

to be continued as the market plays out...

Monthly perspectives FTSE, DAX, S&P, DOW

A look at the monthly charts for major indices, LONG TERM.  Looking toppy ..but as they are longer term, may take a month or so to play out.  UNLESS they break significantly higher then odds are that the next BIG move is down, whether it be correction or END of this BULL MARKET from 2009.
A look at the charts shows some bearish divergences starting to show which in the past have all signalled start to significant down moves.

FTSE

DAX

S&P 500

DOW

Can't see the wood for the trees!

Imagine looking at an oil painting from a distance of a couple of inches? You would not see much of the whole picture, a few splodges of paint.

Sometime charts can be like that especially if one is looking at them day in day out.  So at times it is best to STAND back so one can see the whole picture. That is look at the LONGER time frames, like the Monthly and Weekly charts.  Then it may become clearer what that picture is telling one!

Monthly Charts below
Pretty self explanatory

AUDUSD

CABLE

EURUSD

FTSE

DAX

DJIA

Buy or sell? DAX, FTSE. DOW, NDX

Follow up on previous post  with FTSE DOW and NDX thrown in for good measure
Long? tighten stops
Short? stops are close by, and be ready to reverse on confirmed break higher...

Markets are poised for a break out higher..but will it be after another shake out??
Where's the crystal ball?

Monthly charts for LONG term investors

DAX

OK ! We may be about to break resistance and head to the highs around 8,000 BUT each time we have entered the highlighted area there has been a severe setback for the DOW.  Will history repeat itself ? (or at least rhyme?)

FTSE

Also approaching a resistance band may be quite tough getting through. If it does, then can probability increases for a min test of the highs at 7,000

DOW

Clear up trend.   A break above recent highs should see test of all time high at 14k.  

NDX

Monthly shows clear up trend with recent weakness testing support and rallying.  a rally should go to new highs above 3,000.
Very dependent on AAPL

AAPL DAILY chart


Oversold rally from around 505 level.  Another sell off almost testing the lows.  watch for
either a new low and rally, with RSI diverging (ie no new low in RSI)
or a move from here above 558 for signs that bottom is in.

EURUSD long term chart

Monthly chart

So far the rally off the recent low doesn't "look" complete.  Not to say we don't have a couple of red candles, nothing goes up in a straight line, BUT the declining trend line resistance seems a reasonable HIGH target, (1.40) or lower target 1.34

LONG TERM

Sometimes it's good to "step back" and look at the LONGER term charts..MONTHLY.

All pretty self explanatory.
Breaking multi month up trends
In all 3 RSI has not reached the overbought levels seen in previous TOPS - more rally to come, or a sign that the rally is weaker then it looks?

DAX monthly

DOW INDUSTRIAL MONTHLY

FTSE 100  MONTHLY

FTSE and DAX LONG term charts (MONTHLY)

While markets are trading at or near recent highs worth taking a step back with a look at the bigger picture, IE MONTHLY charts.

We are not very far off the all time highs.
MACD in both cases looks to be turning up (lagging indicator)
RSI is NOT overbought
SO on a LONG term view these markets could be ready to challenge the ALL TIME HIGHS.

BUT shorter term probably due a correction on the DAILY charts (click here)


DAX MONTHLY

FTSE MONTHLY

FTSE stepping back to see the full picture

FTSE monthly chart

LONG term view...
just for perspective..
If bulls start running could be at minimum challenge of 6100 level, and if that breaks then test of all time highs...SCARY!

RSI is neutral, MACD could be in process of turning up