Happy, Healthy and Prosperous New Year to All of You !
As predicted, market was down last week in First Step Down from the highs established on Dec 29, 2014.As shown below for the 5 day chart of SPY, all five sub steps of the First Step may have been completed on Friday afternoon or may be completed today by going to new lows by extending the decline. We now expect a rally in Step Two up . It may take us up 50% of the complete decline from High on Dec 29 to intraday low established . It can go as high as the previous highs in DJI & or SPY .
DJT, QQQ, NASDAQ composite, NYA will not go to previous highs. Not all stocks will participate in this rally. Look at even Apple and Google and Amazon. They did not participate in December rally.
We expect a bigger decline after this short term rally is completed.
Markets are cyclical. The last time we had more than 10% correction was 27 months ago. It is about time we had another correction. Earnings in 4th Quarter will be under pressure because of huge drop in energy sector.So P/E will have to come to new lower levels as SPX earnings will be lower. That alone will drop Stocks soon. With National Debt at record high of 18 Trillion, we are worse off than we were in 2007-2008. What about manipulation of currencies by Japan and Euro zone ? Our auto manufacturers have several thousand dollar worth of disadvantage against Japanese and Euro zone manufacturers ? Same is true in many industries. How long will it continue?
The coming short term rally may be the last time you will be able to get out of the rally near record high values!!
DJI
SPY
SPY Since Dec 28, 2014
IWM After the rally in Step 2 is completed, it will go below Dec lows and then below October Lows
TNA
TZA
GLD
SLV
GDX
NUGT
TLT Reached recent highs.
TMV Ready to go up
UNG Natural Gas ETF Ready to go up for a short term rally. It made 27 Month low on Dec 31, 2014
UGAZ Very Cold Weather next will boost this
DGAZ Short term decline expected
UVXY 3X Volatility going down short term and then up sharply
SVXY going up Short term and then down.
ERX It will go down again to below recent lows. There may be short term rallies in some of the stocks.
ERY
RUSL Russian Market ETF Going Lower
RUSS Going Higher as RUBLE is declining again
As predicted, market was down last week in First Step Down from the highs established on Dec 29, 2014.As shown below for the 5 day chart of SPY, all five sub steps of the First Step may have been completed on Friday afternoon or may be completed today by going to new lows by extending the decline. We now expect a rally in Step Two up . It may take us up 50% of the complete decline from High on Dec 29 to intraday low established . It can go as high as the previous highs in DJI & or SPY .
DJT, QQQ, NASDAQ composite, NYA will not go to previous highs. Not all stocks will participate in this rally. Look at even Apple and Google and Amazon. They did not participate in December rally.
We expect a bigger decline after this short term rally is completed.
Markets are cyclical. The last time we had more than 10% correction was 27 months ago. It is about time we had another correction. Earnings in 4th Quarter will be under pressure because of huge drop in energy sector.So P/E will have to come to new lower levels as SPX earnings will be lower. That alone will drop Stocks soon. With National Debt at record high of 18 Trillion, we are worse off than we were in 2007-2008. What about manipulation of currencies by Japan and Euro zone ? Our auto manufacturers have several thousand dollar worth of disadvantage against Japanese and Euro zone manufacturers ? Same is true in many industries. How long will it continue?
The coming short term rally may be the last time you will be able to get out of the rally near record high values!!
DJI
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