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September 1, 2015

S&P 500 7-Year Cycle

 By Chris Vermeulen

The SP500 index (US Stock Market) has now officially exited its up trend. It can be argued that the stock market is either in a stage 3 topping phase or a stage 4 decline. Either way, it’s not good for buy and hold investors.
The major trend line on the chart below has been broken in a big way. The AlgoTrades INNER-Market Analysis tell us to be sitting pretty in cash, or short the market so you can profit from falling prices over the next 6- 18 months.
I do fear a global economic collapse is possible which I talk about in our ETF Trading Newsletter – TheGoldAndOilGuy. In August we started investing in funds that will rise as the stock market falls in value. If you need help with this be sure to check out that newsletter.

 

S&P 500 Quarterly Chart – BIGGER PICTURE

This chart I feel provides a great perspective on the overall market trend and price patterns. This is the 70 year historical chart. I hope something like this unfolds. Fingers crossed to a nominal 12 month correction/bear market. This will build a new base for the next super cycle.
US Dollar has now reached the upper resistance trend line… we could see weakness in the dollar going forward… Keep in mind this is a quarterly chart, lower prices may still be a few months away.


 
Stock Market Rises with Fewer Stocks – RED FLAG
Since mid 2014 the US stock market has become move volatile. Fewer stocks participating in the markets move up. This can be seen by comparing the percent of stocks trading above their 200 day moving average and the S&P 500 index.
Last issue I stated “Once the stock market comes to a complete stall it will drop violently.”
What we saw from August 20 – 24th was the break of the bulls back… The market always has a way to keep average investors bullish and left holding the bag of overprices stocks when the music stops. The market could very well rally here and test recent highs or possibly make a new high to be sure investors remain bullish to buy into the next wave of distribution selling.


 
INNER-Investor Monthly Conclusion:
The months of July and August were incredible months for our automated trading systems as you can see from our recent results. The frustrating part is that it takes some time for us to move and integrate this improved system into the platform to trade everyone’s account. Our trading system has done incredibly well during on the toughest market conditions we have experienced in years, users of our system did not have these trades executed in their accounts as that starts/started on September 1st 2015. It is tough watching all this money being made day after day and the trades are not executed in our users accounts, but the good news is that our systems are live and trades will be executed in users accounts now!
The stock market typically falls 3-7 times faster than it rises, which means we can make more money, and make it faster during a falling market then we can make from a rising market. Now that the trend has turned down we should be off to the races with outsized trading gains once again.
The simple solution to profit from this market is to become a user of our Automated Trading System so these trades are executed for you, allowing you to enjoy the finer things in life like spending time with family, friends or your own business.
 
Chris Vermeulen
TheGoldAndOilGuy.com – ETF Trade Alerts

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle


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Item Reviewed: S&P 500 7-Year Cycle Rating: 5 Reviewed By: Econ Matters