IS THE STOCK MARKET TELLING US SOMETHING?
My earlier post about the stock market being in a major uptrend has not altered.
The reasoning is the same that proved the first post to be correct. My signals back then, showed strength in the stock market and the market backed that up by going higher and higher even while the news headlines were full of hand-wringing negativity.
How about the recent few day’s pull-back?
There is a crucial price point that will change the complexion of this market though and I’ve created a special chart showing this point on the chart below which can be viewed by members.
THE CRITICAL PRICE POINT TO WATCH IS SHOWN ON THE CHART BELOW
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SHORT-TERM: YES, A DECLINE IS UNDERWAY
The chart above clearly shows the price trigger point for the present decline which is, at this point, an expected pull-back from the main trend.
The chart below shows the price point at which to take notice that the market momentum has shifted seriously.
In addition, if this price retracement is a normal one, then, heavy institutional buying will come into the market at approximately the price area shown with the green bar on the above chart.
That would be a great point to accumulate stock if the major trend remains intact.
The critical price break point will be at the area shown by the lower red bar. If price penetrates this on a daily closing basis then we’ll have an early indication of the end of the major trend and of a downward trend that could last months or longer.
MY PITCH FOR THE EXCALIBUR TRADING METHOD
For those members who haven’t yet secured your copy of the Excalibur Trading Method, please read on (those clients who have can jump to the next bold heading below).
The track record is clear for the last 4 years on this site doing live predictive calls that this is a superior process with seriously successful results (see testimonials).
It’s important to have a means of analyzing the market so that you can be confident that you know where you are in the minor and major cycles and that’s why the Excalibur Trading Method is used in this example and on previous posts. It’s an affordable and invaluable tool for serious investors and traders who have to keep tabs on the short-term and the long-term movements of price. Contact me (George) for more info on this.
WHAT’S THE PUBLIC MIND ABOUT THE MARKETS?
Hesitation and fear seem to describe it, and, that’s entirely normal.
It seems to me that there’s just too many out there who are waiting for the ‘Big Crash’ and, that many people with the same opinion have never proven to be right on any turning point in the Markets before in History.
So, I wouldn’t expect today to be any different. That’s just not the safe way to bet.
And, so far, the analysis backs this up. Small relative price swings yield exaggerated headlines and press.
Let me tell what I have seen over the last 40-plus years of observing the markets though; and that’s the majority of the public standing back with their hands in their pockets while staring in disbelief while the stock market went higher and higher and still ridiculously higher again.
There’s never been (in my observations) any real ‘reason’ for market climbs (or falls for that matter) that are clear at the time of their happening.
Usually, market rises take place in the presence of negative news or at times of general public disinterest in the market or fear which creates hesitation. The end effect is the same though, inside interests participate while the public is shut out by their own fears or misinformation.
The present downturn is still another case of this. This morning I read a news article that used the headline: ‘PUMMELED’ in reference to the stock market’s actions this week, yet, when I look at my price charts (as you should look at yours) what do we see?
Hardly a ‘pummeling’ and, instead, a very familiar sight. Prices peak and subside to breathe on the way to higher highs which then peak and subside to breathe, etc..
This is how bull markets work. Unless we’re following a market on a daily basis we’ll never pick the absolute day of a top. It takes time to work out momentum.
WD Gann fully expected pull-backs in price as a normal part of a trend in progress. Even while he expected this, he still always employed stops to protect his trades (the proper placement of those stops is another of the Excalibur Trading Method’s prime qualities).
In a healthy uptrend, 2-3 week retracements are the norm.
Remember that to keep your perspective untainted by the ‘news’. – George [/private_Free Observers Level Membership] [/private_Level 2 Elite Membership]