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With the positives of the week the stock market bull seems to have come back - or was he never gone? But in any case, it seems that governments and central banks are doing a great job in providing the world with helicopter money to placate the masses and the financial markets. Perhaps it will even succeed in the long run. Again.
Because the US equity bull market seems to have come back. Just as the ghost comes out of the bottle when you gently rub it. As far as the NASDAQ-100 index is concerned, the bull never stopped running.
This definition of a bear market occurs when prices in a market decline by more than -20% from recent highs amid widespread pessimism and negative investor sentiment is also somewhat confusing, as in such a -20% down wave additionally the most dominant main support must be broken finally to the downside to name such more than 20% downer a bear market.
The NASDAQ-100 index continuous emini futures contract (NQ #) itself dropped by -29% from 2020 highs to 2020 lows within the coronavirus panic sell-off wave. However, the NASDAQ-100 contract never broke its yearlong existing main support. Main support was shortly undercut, yes. But there' s no way it was even slightly damaged by 2020 lows behaviour.
On the contrary, the recent positive rebound starting at the now for 4 years holding Yearly Support looks even more impressive than the last one that was triggered after sealed year 2018 Xmas Low:
So was coronavirus sell-off a bear market or just the next quite normal correction wave in the DECADELONG bull market? I think the latter is clearly the case. At 6628.95 pts March low = so far year low, the emini just tested back its rising dark-green Yearly Support rail very successfully to the T. This is getting confirmed by the week close far, far above the 61.8% Fibonacci resistance retracement level what runs at 8565.72 pts.
Bear markets do not allow the 61.8% retracement to be recaptured. Certainly not so quickly. Accordingly, the NASDAQ-100 must be in the bull market.
And believe it or not, the NQ # with a +70% odd will probably be able to deliver the highest monthly closing price ever with the monthly closing price of the current running April because April is traditionally one of the most bullish months of the year what has a strong historical track recond showing strenght from the start to its end.
For this likely outcome see this seasonal chart that Jeff Hirsch from the Almanac Trader recently published with the head: „Typical April Trading: Strenght from Start to Finish“. Source: jeffhirsch.tumblr.com:
... which would also imply that a perhaps due April full pull would automatically lead to the S&P 500 and Dow Jones Industrial Average regaining their respective 61.8% Fib retracement resistance levels. And thus - at least officially or purely theoretically - can no longer be able to trade in a bear market.
And let this gently melt on our tongue. When April prints the highest monthly NQ # closing auction ever, the „BIG ROUND“ 10000 pts W.D. Gann uptarget number magnet again is confirmed and likely will be worked off then fast, probably later this year.
GUNNER24 Forecasting Method predicts this outcome next for the NQ # market:
Above is the NQ # weekly chart and a setup that starts at # 1 // 2018 Xmas Low what is higher DECADELONG bull market low. The Blue Arc is moved to the intermediate rally highs of the April 2019!! We have to keep this sign in mind, because after the end of the current April another important intermediat high can or could be imminent as then the best six months period of rising stock market prices offically is over.
Setup offers – among and together with other resistances in the higher time frames – that the 2nd double arc main resistance energy triggered the sell-off after the price reached & tested & finally worked off the lower line of 2nd double arc, at same time natural important 2020 uptarget out of the initial up impulse, measured by the Blue Arc.
The coronapanic wave successfully tested very important support out of # 1 // 2018 Xmas Low, namely the natural important 1*2 Support Gann Angle. This rail was defended on weekly closing base at 2020 sell-off lows.
Therefore it is allowed to assume that this 1*2 Support Angle has morphed to confirmed rising important gann angle support on yearly base. Also, perhaps and maybe very likely the 1*2 Support Angle triggered the final low of entire 2020. This is a 60% probability, IMHO.
Reason for this is the exeptional bullish reaction starting at the 1*2 Support Angle what was able to re-conquer the A) 1st double arc, then natural resistance, but also the former finally downward broken B) important 1*1 Gann Angle but also C) red-dotted highlighted first square line resistance with the closing price of the week before last trading week. That week candle also conquered D) the 50% Fib retracement line of the 2018 Low to 2020 Top bull market leg at the same time.
==> All in all, this signal the week before last provided an extraordinary quadruple!!! GUNNER24 Buy Candle. And such are very rare sightings. This quadruple weekly long signal became fully confirmed with this week close what is way above the 38.2% Fib level at 8256.96 pts and most important is a relative safe signal for that the DECADELONG bull market has resumed.
Respective has never ended!! The 7 FANGMAN stocks do what they always do in this DECADELONG bull run. Once again they outperform everything else!
YTD performance of the FANGMAN stocks which represent about 48% of the NASDAQ-100 weighting:
Facebook -12.67%
Apple -3.69%
Netflix +30.72%
Google -4.51%
Microsoft +13.25%
Amazon +28.53%
NVDIA +24.23%
==> business as usual – and a rule should be, as this 7 leaders go, so goes the US stock market.
Well, this now very confirmed quadruple weekly buy signal triggered the backtest of lower line of 2nd double arc main resistance which could come true towards late-April to early May.
==> powerfull April seasonality should help to force the NQ # for the very likel due!!!!? backtest of lower line of 2nd what is very important major GUNNER24 Backtest Magnet together with the very attractive natural backtest target of the sell-off breakaway gap what runs at 9635 to 9355 pts.
Hmm, late-April somewhere between/at the 9635 to 9355 combined upmagnet resistance = BIG YEARLY resistance magnet, the market could end this bounce cycle out of 2020 lows to then deliver here and there its first important lower high of 2020, followed by the the dark-red dotted resistance arrows outcome with the possible main goal of testing back the 1*1 Bull Market Angle support intensive and sometimes in course of summer, only to then reach its BIG 10000 pts natural main goal at some point in the further course of the year (phat dark-green dotted arrow placement).
However, and this is due to the fact that if the index has just reached its final annual low 4 weeks ago, it may well be the case that the current rally cycle wants to work off the BIG ROUND 10000 pts at some day in May 2020!
Normally the cards will be shuffled completely new, after reaching the 10000 pts because such important round stuff often result in new valuations...
Buying NQ # at a 8260 to 8200 pts within next 5 to 7 trading day`s looks like a high reward-low risk long attempt cause this likely would mean just a „classic and textbook“ backtest of 1*1 Bull Market Angle and 38.2% Fib retracement line, which together form the strongest future weekly support at the moment.
Be prepared!
Eduard Altmann
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