• 278 days Will The ECB Continue To Hike Rates?
  • 278 days Forbes: Aramco Remains Largest Company In The Middle East
  • 280 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 680 days Could Crypto Overtake Traditional Investment?
  • 685 days Americans Still Quitting Jobs At Record Pace
  • 687 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 690 days Is The Dollar Too Strong?
  • 690 days Big Tech Disappoints Investors on Earnings Calls
  • 691 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 693 days China Is Quietly Trying To Distance Itself From Russia
  • 693 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 697 days Crypto Investors Won Big In 2021
  • 697 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 698 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 700 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 701 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 704 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 705 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 705 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 707 days Are NFTs About To Take Over Gaming?
Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Rollercoaster Ride #4

The 2004 stock market has felt like three different rollercoaster rides so far, and we are on the 4th one right now still going up to the top. The first 3 rides ended lower than they started, which means that we have seen 3 bearish multi-week cycles so far. However, the fourth ride might make the first three look like kiddie rides with the next decline coming in October.

S&P 500 completed it black wave 4 down right at its 50% retracement of its black wave 3 up on August 13, and it is now in its black wave 5 of C up to a lower high below its March high of 1163.23, which would complete green Wave B up that started on October 10, 2002. Then the downhill portion of the ride would be the start of green Wave C down into the fall of 2006, which will be the second half of the current 4-year cycle. Green Wave C down will be a stronger decline than green Wave A was in 2000-2002. Also notice that the 4-year moving average has crossed below the 8-year moving average, which is very bearish sign for the remainder of the 4-year cycle.

The DJ Industrials looks more like SPX, but the DJ Transports is unique in that it is completing an ascending ending diagonal as its black wave 5 of C up. DJT made a new high for 2004 today and will probably reach 3300+ while DJIA makes a lower high below its February high of 10753.63.

HUI and XAU started a new multi-week cycle on July 27. I originally thought inflation fears might cause gold stocks to skyrocket into late September like they did before the 1987 crash when NEM skyrocketed 122% in 12 weeks. But now it might be terrorist fears that might cause gold and gold stocks to rally after SPX starts its decline in October. For example, HUI rose 17.7% during the week after the 9/11/01 terrorist attack while SPX dropped -13.5%. However, HUI was oscillating between its 2-year and 4-year mas in 2001, and its 1-week rally did not continue because of its 4-year ma resistance. But now HUI is above its 2-year and 4-year mas, and gold and gold stocks may continue a strong rally after a possible terrorist attack. So the current multi-week HUI cycle may peak sometime in December around HUI 300-330 and XAU 140-150, maybe near the same time that gold reaches $500+.

Thus, the only stock indexes that will likely make new highs for 2004 are DJT, DJU, HUI, XAU, XOI, and XNG. DJT and DJU already have, and XOI and XNG are very close to making new highs this week. HUI and XAU will probably make new highs later this year. Obviously, new highs in gold, silver, crude oil, and natural gas will explain why. The lower highs by the other indexes will create a bearish divergence in tops.

Back to homepage

Leave a comment

Leave a comment