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Stock Trading Alert: S&P 500 Broke Below Recent Lows, New Downtrend Or Just Correction?

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Posted by Paul Rejczak - Sunshine Profits

on Monday, 17 April 2017 07:14

Stock Trading Alert originally sent to subscribers on April 17, 2017, 6:56 AM.

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,410, and profit target at 2,200, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The U.S. stock market indexes lost between 0.4% and 0.7% on Friday, extending their short-term downtrend, as investors reacted to economic data releases, global politics news. The S&P 500 index got close to its late March local low above 2,320 mark. It is now around 3% below its March 1 all-time high of 2,400.98. Is this a new downtrend or just relatively shallow downward correction before another medium-term leg up? The Dow Jones Industrial Average closed below the level of 20,500, and the relatively stronger technology Nasdaq Composite index closed at around 5,800 mark, following its last April 17 move to new record high. The nearest important level of support of the S&P 500 index is at around 2,300-2,320, marked by previous short-term consolidation, among others. The next support level is at 2,270-2,280. The support level is also at around 2,250. On the other hand, the nearest important level of resistance is now at 2,350, marked by some recent local highs. The next resistance level is at 2,370-2,380, marked by the early April local highs. The resistance level is at also at around 2,400, marked by record high. We can see some short-term volatility following five-month-long rally off last year's November low at around 2,100. Is this a topping pattern before medium-term downward reversal? The uptrend accelerated on March 1 and it looked like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index is currently trading below its medium-term upward trend line, as we can see on the daily chart:

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Stocks & Equities

Economy Contracting but Expect Higher Stock Prices

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Posted by Chris Vermeulen - The Gold & Oil Report

on Thursday, 13 April 2017 10:24

The United States is the world's largest and most diversified economy! It is currently suffering through a protracted period of slow growth which has held down job creation and labor market participation. The Pew Research Center reported, in late 2015, that a mere 19% of Americans trust the government either always or most of the time.

The FED must print more money in order to keep the party going forward.

The bottom line is that this current bull market has been driven mostly by corporations which are buying back their shares, over the years. Individual investors have increasingly been moving out of equity mutual funds and into equity ETF's.

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Stocks & Equities

Buying Opportunities Dead Ahead for Stocks!

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Posted by Mike Burnick via The Edelson Wavee

on Tuesday, 11 April 2017 06:34

A struggling global economy plus shaky governments around the world are triggering a massive flow of capital toward the best available opportunities.

Debt crises in Europe and Japan are driving capital flight out of bond markets in search of better investments.

And at the top of their list? You guessed it: U.S. stocks!

That’s why I’m not one bit surprised that over the past eight years, the Dow Jones Industrial Average has gone up a staggering 227%.

After all, capital is agnostic. It doesn’t care that governments are bankrupt or that their economies are struggling or that their currencies are deflating.

The thing is, regardless of world conditions, there are always people and companies that have enormous amounts of capital to invest. And capital always seeks the safest, best returns possible, no matter where they are in the world.

Larry Edelson accurately predicted this capital flight – away from the public sector (government bonds) into the private sector (stocks) – many years ago. He correctly explained that stocks represent assets that can outlast governments.

In fact, this is exactly what happened during the Great Depression – when the Dow rallied 372% from 1932 to 1937.

And it’s these powerful and undeniable global forces that are driving the bull market in U.S. stocks and will lift the Dow to 31,000.

That’s not a typo: 31,000 on the Dow.

But not without an occasional market correction.

In the long history of capital markets, nothing ever moves in a straight line either up or down – there are always minor corrections against the prevailing trends.

And fair warning, I see this dynamic setting up in U.S. stocks going into mid-year.

In the short-term – days and weeks ahead – the Dow Jones and S&P 500 Indexes could grind marginally higher on the back of strong first-quarter earnings season, but it won’t last.

While estimates have come down, the market is looking for first-quarter earnings growth of nearly 10 percent from the year-ago period – that’s a very tall order. And investors could be disappointed with actual results.

That’s just one of many catalysts that will trigger a healthy and much needed market correction lasting six to eight weeks …

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Stocks & Equities

Stock Trading Alert: Still No Clear Short-Term Direction - Will Uptrend Continue?

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Posted by Paul Rejczak - Sunshine Profits

on Monday, 10 April 2017 07:07

Alert originally sent to subscribers on April 10, 2017, 6:57 AM.

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,410, and profit target at 2,200, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The U.S. stock market indexes were virtually flat on Friday, as they lost 0.02-0.08%, following worse-than-expected monthly jobs report release. The S&P 500 index continued to fluctuate within its two-week-long short-term consolidation along the level of 2,350. The index remained around 2% below March 1 all-time high of 2,400.98. Is this a new downtrend or just relatively shallow downward correction before another medium-term leg up? The Dow Jones Industrial Average closed below 20,700 mark again, and technology Nasdaq Composite index remained below 5,900, following its last week's Wednesday's move to new record high. The nearest important level of support of the S&P 500 index is at around 2,350, marked by local lows. The next support level is at 2,335-2,340, marked by some previous local lows. The support level is also at 2,320, marked by February 13 daily gap up of 2,319.23-2,321.42, among others. On the other hand, the nearest important level of resistance is now at 2,370, marked by short-term local highs. The next resistance level is at 2,380-2,400, marked by all-time high, among others. We can see some short-term volatility following five-month-long rally off last year's November low at around 2,100. Is this a topping pattern before downward reversal? The uptrend accelerated on March 1 and it looked like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index continues to trade along its medium-term upward trend line, as we can see on the daily chart:

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Stocks & Equities

Something Very Important Is Finally Happening In The Stock Market

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Posted by Avi Gilburt - Elliottwavetrader.net

on Friday, 07 April 2017 08:17

Last week, I noted that as long as the S&P500 holds the 2320SPX level, it will begin a rally. On Monday, the market bottomed at 2322SPX, and began a 2% rally.

If one takes the time to become an open-minded market observer, one can learn a lot about the stock market, and how human beings react within the stock market.

We all know and love the phrase "buy low, and sell high." While that is the ideal goal for investors, most investors are unable to attain their goals of buying the lows or selling the highs. Why is that? It is simply because we are emotional creatures, and we allow our emotions to drive our buying and selling decisions. For that reason, we are fearful to buy when all others around us are fearful as price drops, and we are exuberant and unable to sell when all others around us are euphoric at the highs. When you come to grips with this simple fact, and begin to understand the nature of the market, then you are on your way to becoming a much better investor.

So, back in February of 2016, when everyone was fearful of a stock market crash, we were turning quite bullish. And, we will not likely be turning bearish until the rest of the market turns bullish.

In fact, back in 2015 and going into 2016, I was warning my members at Elliottwavetrader.net that not only are we setting up for a rally which will take us to 2500+ on the SPX, but I was also expecting that the paradigms and correlations many follow would be breaking down.

And, since that time, as the evil emperor in Star Wars noted, "Everything is proceeding as I have foreseen."

Moreover, it seems that Morgan Stanley has finally taken notice, stating this in early 2017:

"Regional correlations, cross-asset correlations and individual stock and FX correlations have fallen simultaneously. That's unusual; we haven't seen a shift this severe in over a decade . . ."

Before the election in November of 2016, I was again preparing the members in our trading room at Elliottwavetrader.net for the next phase of the strong rally I was expecting, which would take us into 2017. And, since that time, it seems the rally has not only taken most market participants by surprise, many still remain within their mindset of disbelief.

However, recently, I am witnessing something quite notable in the stock market. I am starting to see some former bears beginning to embrace this stock market rally. In fact, someone who was fighting this rally tooth and nail for quite some time noted this past week that "the traditional causes of recessions . . . are nowhere on the horizon."

Those words were music to my ears. And, I am going to expect that more and more bears will be coming over to the dark side. Even Harry Dent, one of the biggest bears in the market for many years, turned bullish in early 2017. Yes, my friends, it seems the long-term topping process has begun. But, we still have a ways to go.

In fact, in Elliott Wave parlance, the point in time when former bears turn bullish begins once we move through the point of recognition, which is the heart of the 3rd wave within Elliott's 5 wave structure. And, as you can see from the attached "before" and "after" charts, the heart of the 3rd wave, wave (III) of (3), is now done, which is likely why many former bears have begun to turn bullish.

See below two daily SPX charts by Avi, the top one from December 10, 2016 and the bottom from April 3, 2017, indicating how the S&P 500 closely followed his projected 3rd wave path. Click to expand charts

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