• 49 mins A War Is Brewing Between San Fransisco's Rich And Poor
  • 3 hours Tesla Posts Surprising $700 Million Loss In Q1 Earnings Report
  • 19 hours Soaring Healthcare Costs Jeopardize Retirement In America
  • 22 hours Lawmakers Propose Tax On Ultra-Wealthy To Curb $1.5 Trillion Student Debt
  • 1 day Chinese Banks Are Running Low On Dollars
  • 1 day Texas Builds Gold Depository To Rival Fort Knox
  • 2 days Feds Target Forex Company In $75 Million Ponzi Scheme
  • 2 days The Surprising Catalyst Sending Some U.S. Home Prices Soaring
  • 2 days Is The Global Bond Bubble About To Burst?
  • 2 days Investors Are Piling Into Tax Exempt Municipal Bonds
  • 3 days Strong U.S. Dollar Weighs On Blue Chip Earnings
  • 3 days How Millennials Are Reshaping Real Estate
  • 3 days Is America's Love For Cars Fizzling?
  • 3 days Increased Solar Demand Could Spark Silver Buying Spree
  • 4 days Amazon Calls It Quits On Alibaba’s Home Turf
  • 4 days Market Euphoria Weighs On Gold
  • 5 days Did Facebook Just Become ‘Uninvestable’?
  • 5 days Electric Vehicles Are Reshaping The Mining Industry
  • 6 days Buffett, Dimon Voice Support For Stock Buybacks
  • 6 days Newmont Goldcorp Now World's Top Miner After Sealing The Deal
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…

Tesla Struggles To Compete In European Market

Tesla Struggles To Compete In European Market

Tesla continues to catch the…

  1. Home
  2. Markets
  3. Other

Stock Market: CNBC Report


Intermediate counter trends or rallies against a major down trend have very similar characteristics no matter the market. They do not test the low; the retracement of the move down is 1/3 to 3/8. The time runs approximately 90 calendar days but can run out to 144 days on rare occasions. There are three tests of the upper level of resistance followed by a lower high or two lower highs. This is followed by a fast move down to break the lows.

This move has done everything but the third test. But there is now in place a possible lower double top with a 5 day struggle up into the last lower high. If this takes off down now and moves through the last low in a few days it could indicate the completion of a counter trend. I have been waiting for a clear third test by maybe in this instance it may not be necessary. I am still hoping for a third test but you may want to watch this for a few days. This could be a catalyst for a further spike up in stock indexes.


You can see there was a huge exhaustion move March through May of 2006. This is the same pattern of trending that is now going on in the stock indexes. Gold then had a fast reversal down and a big 3 week retracement. This was followed by a 12 week struggle down to successfully test the low that started the 3 week rally. The market is now up 28 weeks and was a weak trend up. I said weak because the retracements of each 7 week rally have been large and the last rally has been weaker than the previous two rallies. A big three thrust structure below a spike high can be a large distribution pattern. I would prefer to see a marginal new high to complete the pattern, but this is something to keep an eye on for the next few weeks.


There have been 3 down days with the last day reversing back up after running down. If it cannot extend that reversal back up today it will likely make a run down to successfully test the "obvious" old high. If it can move higher it will be doing so from a 3 day move down which does keep the fast trend intact. It still looks like this is the start of some sort of congestion or consolidation before the final push into the June 12th high. If we look at previous exhaustion legs of similar circumstances they run 15% to 22% and that yields a minimum move to 1568, so there is still more of this fast trend between now and June.


Back to homepage

Leave a comment

Leave a comment