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Market Cycles - Waves and return to the mean - Part 7 S&P 500Here is the culmination of my last 4 months of technical analysis of the stock market. I looked at important growth stocks of the past and where they are today. From that analysis, I applied the lessons learned to todays market. 1) Growth stocks break out of the mean channel of wave 1 to finish wave 3 and 5. Average stocks stay in the mean channel. 2) The following correction will take them back to the project mean of wave 1, maybe even below. The more they break above the mean the more they drop during the correction. 3) Head and Shoulders pattern usually describes motive waves 4-5 and the following corrective ABC wave. After a major correction several things can be learned 1) Some companies never really recover, assume they just had high prices because every company did (thing tech bubble) 2) Some companies recover but never become growth stocks again and grow but stay along a mean growth 3) Some companies are able to reinvent themselves and become growth stocks again (MICROSOFT) I can't say I did everything correctly. I took my best shot at it and at the minimum gives a solid idea what could be to come for stocks in 2020 and beyond. I broke this down in several idea posts. Market Cycles - Waves and return to the mean - Part 1 GE Market Cycles - Waves and return to the mean - Part 2 AT&T Market Cycles - Waves and return to the mean - Part 3 IBM Market Cycles - Waves and return to the mean - Part 4 MICROSOFT Market Cycles - Waves and return to the mean - Part 5 GOOGLE Market Cycles - Waves and return to the mean - Part 6 AMAZON Market Cycles - Waves and return to the mean - Part 7 S&P 500 Market Cycles - Waves and return to the mean - Part 8 NASDAQ Hope this helps and good luck.
AMEX:SPY
by Dr_Roboto
Nasdaq – Corrective Wave C where does it stop?I made some tweaks to my long-term wave analysis of the Nasdaq. I thought that there maybe a small correction then one more rally high up before a major correction. However, after some more noodling through it this morning, there is a more than zero chance that the upcoming corrective wave C may be it. The rally off the recent low (Wave B) in March hit 1.236 of Wave A exactly on Thursday (long pin up to touch it). That would be the end of Wave B. This puts us in either an Expanded Flat or Running Flat corrective wave (both end at 123.6% of wave A). Here are the options. Running Flat -> Wave C = 61.8% – 100% of wave AB Expanded Flat -> Wave C = 123.6% – 161.8% of wave AB That is a pretty big range to pick from. Based on my posted idea from yesterday, we have ended the super cycle motive wave for tech. Will this be the end-all corrective wave after such an impressive motive wave for the last few decades? If so, then an expanded flat would do it but it could take us all the way down to the 4500 range within a few months. Will the Fed pump give us a running flat that limits the pain in the short term, but we run the risk of a drawn out multi-year bear market that slowly and painfully works its way down to 4500? FYI, the same pattern is developing in the S&P 500. The S&P looks to be in a Zig Zag Corrective wave. It hit 0.854 of Wave A instead of 1.236 like the Nasdaq. Hope I am wrong and hope this helps. Good luck out there.
NASDAQ:QQQLong
by Dr_Roboto
5
S&P 500 Waves - Up or Down the rest of the week???After yesterday's rally anything goes. The wave count could be 5 waves up or 3 waves up, both are viable. That long pin on the last candle hit 1.618 in a 3 wave, and if that is true then we are still in the corrective wave. I am still on the bearish side and expect more down. I am going with yesterday as a big short squeeze. The power of the Fed is hard to argue with as the results so far are amazing. Going to watch this play out. Hope this helps and good luck trading.
OANDA:SPX500USDLong
by Dr_Roboto
1