Trump Stock Market

By: Bob Loukas | Mon, Nov 14, 2016
Print Email

Equities sold off sharply as the election results started to come in, but by the end of the week, the market had settled generally higher.  As with Gold, equities have a Cycle trending in a certain direction, and we should continue to follow the dominant trend until the action directs otherwise.

The Dow Jones made a new high this week, but the broader market has yet to follow. And since weekly Cycle timing continues to favor more downside before an Investor Cycle Low (ICL), the resistance line on the below chart should continue to hold. At this point, there is not enough evidence to warrant speculating about a new Investor Cycle (IC) and IC rally.

For now, a reversal lower from here as part of a Left Translated Cycle is the highest probability scenario for equities. But the highest probability scenario does not always come to pass. If, instead of rolling over, the market moves to a new all-time high, we will need to quickly change our perspective.

It is not always easy for traders to shift quickly - too often our egos get tied up in a viewpoint - but the markets do not care. They will go where they go. At best, traders are right on a market's direction only 60% of the time; it's how a trader formulates and executes his strategy that matters most. Traders must embrace planning and execution, and must remain adaptive. To do otherwise risks getting caught in a position that is fighting a trend.

S&P500 Daily Chart

The size of the post-election, Trump Stock Market bounce has pushed the weekly Cycle indicators high enough to threaten a new Investor Cycle.  The possibility is very real, but it's not a slam dunk. If we are in a new IC, an ICL would have been printed at 18 weeks, slightly short of the normal timing band for it. And from a technical standpoint, the ICL would have been very mild.

The S&P has moved back above the 10-week moving average - generally confirmation of a new IC - but it has not yet decisively smashed through this resistance zone and moved to a new all-time high. If it can move quickly to a new high, a major rally could well be brewing. Until then however, I will continue to expect a more traditional ICL selloff in the coming 6 to 8 weeks.

S&P500 Weekly Chart

 


The Financial Tap – Premium

The Financial Tap publishes two member reports per week, a weekly premium report and a midweek market update report. The reports cover the movements and trading opportunities of the Gold, S&P, Oil, $USD, US Bond’s, and Natural Gas Cycles. Along with these reports, members enjoy access to two different portfolios and trade alerts. Both portfolios trade on varying time-frames (from days, weeks, to months), there is a portfolio to suit all member preferences.

NOTE: The Financial Tap offers you a Full 14 day, no risk, money back Trial. It’s just $99 thereafter for a full 3 months of membership, a fraction of what one stopped out trade is likely to cost you. Consider joining The Financial Tap and receive two reports per week and the education you need to become a better trader or investor See >> SIGN UP PAGE!

 


 

Bob Loukas

Author: Bob Loukas

Bob Loukas
The Financial Tap

Bob Loukas is the founder of "The Financial Tap", a membership site dedicated to helping traders and investors navigate the markets while increasing their expertise and understanding. Bob has over 20 years of experience in trading the markets, is a life-long student of economics, and has an abiding passion for the financial markets. Much of his investment philosophy is top-down in nature, beginning with a global and macro outlook which is used to create a framework that drives his intermediate investments.

Bob is a leading expert in Market Cycles. His love of Cycles grew after his introduction to the work of Walter Bressert, one of the pioneers in the field. Cycles were a natural fit with Bob's passion for top-down analysis. As Cycles are intertwined on multiple time frames, understanding the global outlook greatly helps him to identify the long dated Secular Cycles. From that point Bob is better able to identify the shorter Cycles and to build a cohesive investment strategy. Bob's Cycle Analyzer, a software based analytical and intelligence system, is used to predict the future movements of the major financial markets.

Originally from Sydney, Australia, he is now settled and has been working in New York City for the past 13 years. His background and education is in Computer Sciences and he holds a bachelor's degree from Monash University in Melbourne Australia. He has extensive experience in the Financial Software area and has served as a senior executive at various Fortune 50 management teams developing financial trading and reporting software.

Happily married with two children, family is a big part of his everyday life. Other passions including golf and long distance running. He plans to complete the 2012 New York City marathon.

Legal Disclaimer: The FinTap LLC is a content provider and publisher and is not a registered broker-dealer. By accessing The Financial Tap website and/or using The Financial Tap products and services, including without limitation any and all content available on or through the Service, you understand and agree that the material provided in The Financial Tap products and services is for informational and educational purposes only, and that no mention of a particular security in any The Financial Tap product or service constitutes a recommendation to buy, sell, or hold that or any other security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. You further understand and agree that none of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in any The Financial Tap product or service may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

You understand and agree that any The Financial Tap product or service may contain opinions from time to time with regard to any securities mentioned in other The Financial Tap products or services, and that those opinions may be different from those contained in another The Financial Tap product or service. You understand and agree that, from time to time, any or all of the information providers or their affiliates may hold positions in securities mentioned and that they may trade for their own account. In cases where the position is held at the time of publication, appropriate disclosure is made as of the time of publication.

You understand and agree that performance data is supplied by sources believed to be reliable, that the calculations in any The Financial Tap publication or service are made using such data, and that such data is not guaranteed by these sources, the information providers, or any other person or entity, and may not be accurate or complete.

BEFORE SELLING OR BUYING ANY STOCK OR OTHER INVESTMENT YOU SHOULD CONSULT WITH A QUALIFIED BROKER OR OTHER FINANCIAL PROFESSIONAL TO VERIFY PRICING INFORMATION AND TO SOLICIT ADVICE AS TO THE APPROPRIATENESS OF A GIVEN TRANSACTION OR INVESTMENT.

Copyright © 2012-2017 Bob Loukas

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com