Stock Market Pullback Musings

For several weeks we have been familiar with the expectation that the 1-year-cycle highs of the stock markets should come in around the end of January until around the beginning of February.

Within: http://www.gunner24.com/newsletter-archive/december-2019/08122019/

„And what is still waiting for the S&P 500 is this ...", I analyzed the possibly due very important exhaustion high`s outcome of this rally and most preferred option was that 1-year-cycle high`s for the US markets usually should be printed sometimes in course of January 2020, what is the 14th month candle of the at # 1 // final 2018 lows triggered next major bull market upcycle. 14-1 is the prominent 13 Fibonacci number. Which for us, who are price/time traders, always announces a possibly important impending turnaround in time.

The cue, the news, which then triggers the cycle highs and the correction finally doesn't really matter. They always take what is served on the tray and somehow makes sense. That it is now possibly this coronavirus that the clickbaiting prophets of doom and the mainstream media will use to build up one of the greatest possible fear scenarios - namely the reduction or the extermination of mankind in a Pandemic World War Z fits perfectly into the picture and is the perfect excuse for the possibly printed final 1-year-cycle highs:

YM # 29362 on MLK-Monday 20

FDAX 13639 on Wednesday 22

ES # 3337.50 on Wednesday 22

NQ # 9287.25 on Friday 24

However, the economic dent in the People's Republic of China and possibly all of Asia, which is to be expected with certainty as a result of this large-scale epidemic, does provide considerable threat and correction potential for some sectors like airlines, consumers, international trade, oil, industrial miners and can therefore not only lead to the „quite normal“ deeper and longer -3% up to -7% pullback which almost always comes true after important annual highs have been completed.

A classic -10% correction in the strong bull market before the rally should then resume is an existing option that the stock market indexes may want to draw!

Q: Why? A: the Big Round 3000 pts in ES # and S&P 500 might be tested back. The 3000 has morphed to a DECADE Support Magnet and this is why the 3000 is most prominent backtest target for the entire year 2020 and beyond of course.

ES # 3337.50 pts alltime-high - 10% => 3304.13!!

Until the week close nothing really imporant has happened and the bull trends in the US & Europe daily charts have been fully intact. The first sell signals in the daily charts might be triggered with the opening auctions of the coming week. I have this weekend indications, actually:

Dow Jones -195 pts/-0.68%. FDAX -80 pts/-0.6%. Hang Seng -308 pts/-1.11%.

Because the cycle highs are very likely to be in now, for the first time we should seriously focus on the retracement cycles that may have already started. For today's edition, I have decided to and forecast the ES # (S&P 500 emini), the FDAX (DAX future) - as representative for Europe -, and the NQ # (NASDAQ-100 emini) as representative for the strongest bull market.

All we need is the respective monthly chart with the most valid monthly GUNNER 24 Up Setup, which is now always the 8 Candle up, which always starts measuring to the upside at the most important low of 2018, what is the 2018 Xmas low. There where the rally into the presumed 1-year-cycle highs began. Starting with the December 2018 candle up to the current January 2020 candle, we always count 14 - 1 = 13 Fibonacci number candles.

These 3 markets AT THE SAME TIME reached and processed their individual previously activated first important & natural GUNNER24 Uptargets with the printed January highs!

So, this understanding and MAJOR time/price rule is now valid:

The price factor (target = presumably major resistance) met time factor at January (13 Fib number = important possible turn number) 2020 highs, a bull run/bull market oriented by the prominent Fib number 13 would have had to stop there turning downwards in order to correct subsequently, to pullback, whatsoever.

Ready for ES # pullback targets which usually might be worked off within next 5 to 9 trading weeks?! IF market indeed has finally topped at 3337.50 pts on Wednesday 22 ==>

Highs at naturally anchorable Resistance Angle upmagnet and lower line of 1st double arc GUNNER24 Uptarget. And it is likely that one of the main resistances of the highlighted „ATH Upmagnet Resistance Fan“ has kicked in now. Highs are made at remarkable strong resistance magnet!

A pullback cycle – usually - has to test back strong combined monthly and yearly support magnets below current quotations.

As calculated first, an „ideal“ -10% correction leg ideally would test back the Big Round 3000 W.D. Gann support number, which is perhaps the most interesting magnet for the just fresh started 2020-2029 DECADE.

Please watch carfully, that a „quick shock and awe“ 5-weeklong -10% correction underway would also test back the Blue Arc = has morphed to a yearly support, as the fat dark-green dotted line which represents also a yearly support rail because there the very last important higher bull market low was printed at the early-Octobe 2019 lows. The decisive higher bull market low, what has triggered one of the strongest rally & exhaustion legs ever.

For Feb20 candle there is truely prominent, and also strongest combined yearly, monthly & DACADE base support magnet exactly at the 3000!

At the moment we cannot say whether it really drops soooo fast that low!

If market wants just to pullback what seems most likely move after such an enormous rally, it could print the final pullback lows at the dark-green dotted 2019-2020 rally support line either in course of February, then at around 3080 pts or/and at 3155 pts in course of March 2020.

Prepare for DAX/FDAX pullback targets that also usually might be tested within next 5 to 9 trading weeks. IF FDAX indeed has finally topped at 13639 pts on Wednesday 22 ==>

This fresh alltime-high for German Lead Index after 2 full years is MAJOR bullish development, activating a 14300 to 14600 pts as next important for this in course of past 2 months awfully lagging market. The fresh DAX ATH somehow indirectly confirms that underway world-wide existing stock market bull run is likely to continue well into the month of April...

... only to mirror this seasonal picture of the DAX more or less which is always a STRONG bull from October to April. This seasonal DAX pattern is one of the best confirmed timing advisors I know. In about 90% of cases this pattern always comes true! This next DAX ATH is a major bull continuation signal for the other Western stock market indexes IN THE LONG RUN!

But cycle highs at lower line of 1st resistance arc and at same time at dark-red dotted monthly resistance rail. ==> It easily could head for the classic backtest of first square line what represents nearest strongest monthly support.

The first square line together with 2019 Support Angle forms most interesting combined support magnet below which is at 12730 pts for the coming February 2020 candle.

A longer and stronger pullback might be able to test back the 2*1 Support Angle, what is most strongest support of entire bull market, IMHO. There the decisive higher bull market low of October 2019 came in. So, another backtest of the 2*1 Gann Angle might be the in the cards. Maybe due for the March. Then 2*1 Gann Angle yearly support, strongest bull market support runs at 12500, then also Blue Arc support could kick in at 12500 pts.

Lowest target at a 12500 big, big combined yearly and monthly support magnet?

Last but not least the NQ #, the NASDAQ-100 emini futures contract ...

As almost always since first listing, this Tech Index was or is the brightest star of the US rally. However, such former outperformance often also requires above-average retracements. IF this market started a retracement cycle, a -10% corrective move shouldn`t surprise at all: