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Since the last monthly buy signal – in October 2014 – the S&P 500 has been marching upwards briskly. November doesn’t even seem to be allowed a correction. It’s kind of a miracle feeling when the US stock markets close in a slight minus one of these days.
The buy signal generated with the October close activated the lower line of the 3rd double arc and thus the 2080 in the 13 Candle GUNNER24 Up Setup in the monthly time frame:
The last time I analyzed the index was in the free GUNNER24 Forecasts of 11/02/2014 where I stated that the October 2014 close above the 2005 major resistance horizontal had released the run to the 3rd double arc:
November 2014 uptarget is thereby the 2080. The December 2014 uptarget keeps being the 2156.
In the course of next week, the 2080 will be worked off after for this week a high at 2071 is to be detected. Traditionally, the Thanksgiving week is mostly highlighted positive in seasonal terms. Next week is a shortened trading week with 3.5 trading days. Thursday is Thanksgiving, hence Wednesday is the last complete trading day of the week.
After – as usual – positively highlighted Monday and Tuesday with a lightly upwards dribbling course, the 2080 lower line of the 3rd resistance might be worked off as early as Wednesday. But I rather bet on the shortened Friday to produce the top. Friday is also the last trading day in November. So, an index close at the monthly high exactly on the lower line of the 3rd double arc resistance would suit in an A 1 way.
I think that the November close might be pretty narrowly beneath the 2080, making November a monthly high at about 2083 and the first or second December trading day delivering PERHAPS ONCE AGAIN a narrowly higher monthly high before a two week feeble correction in the rally leg starts.
The reason for the possible/assumed outcome by the month turn at the lower line of the 3rd is he performance of the index with the important top at the lower line of the 1st double arc in spring 2011 – see the red arrow in the monthly chart above. Since the markets dispose of a memory sometimes reflecting or repeating very precisely the patterns of some important GUNNER24 Magnets, and the lower line of the 3rd represents an exact extension of the lower line of the 1st double arc resistance, in terms of time and price things might turn out as just sketched.
Well, after working off the 2080 a correction – or should I better say finally one correction – on daily base is supposed to start. ==> This one fails to appear completely if November 2014 closes above 2086-2088. In this case the lower line of the 3rd would be broken finally, and also the upper line of the 3rd would be activated as the next monthly uptarget being likely to be reached rather promptly with more than a 75% of probability. As a result, December would have to perform just as November, more or less keeping rising mercilessly and unbraked till year-end, until the 2156 will be reached.
2080 is important monthly resistance. Since 3rd double arcs are always main targets withal where the trend may/can change respectively starts to correct or goes sideways, the market is allowed to depict vaguely the reaction as taken place at the lower line of the 1st. There and then, it came to a correction lasting 5-6 months, the heftiest one of the whole bull market ongoing since 2009!
At the moment, I work on the assumption however that a 1-3 month correction in the uptrend must NOT start BEFORE REACHING the upper line of the 3rd. By all means, this one should test back AT LEAST the round 2000. I.e., the first monthly support at 2005 recorded in the monthly 13 candle up above is at best simultaneous with the next test of the Rally Angle. The 2005 horizontal intersects the Rally Angle in February/March 2015!
In my opinion, at least once the 2000 area will have to be tested back seriously before the 3rd double arc resistance breaks finally in the further course to start afterwards the next merciless up-year “technically clean”. Not only after Gann’s Decade Calendar (years whose numbers end with a 5 are actually extremely strong bull years, periodically) an extreme rise is to be expected = around +30% year performance wouldn’t be a surprise. Also the presidency cycle is putting out lush rises for the pre-election years.
==> If in 2014 the S&P 500 closes at 2150, for the year-end 2015 we may expect about 2800 points (circa +30% performance)!
In order to pick up the minor swings in a subtler way until yearend, we are changing now into the weekly time frame and into the currently valid up setup on weekly base.
The October rally brought the 3rd double arc upwards finally. Thereby, the 4th double arc is next important uptarget in the time frame. If the market decides to follow the Resistance Angle 2 to the uptarget, the S&P 500 will match the uptarget at about 2119 by year end, where the 2119 horizontal resistance, the Resistance Angle 2 and the lower line of the 4th meet.
If the index overcomes the Resistance Angle 2 on weekly closing base – on this assumption is to be worked at the moment – it will attain the uptarget at 2156 in the trading week before the last of the year where Resistance Angle 1 intersects the lower line of the 4th. Thus, weekly and monthly time frames will be in perfect price-and-time-harmony at 2156 for Christmas. 2156 is recognizable weekly up magnet. It is monthly up magnet anyway.
If a correction starts from 2080-2085 in the 8th week of the current swing (the swing began at the October lows being next week its 7th…) it should be able to test at most the 2020 horizontal support of the currently passed square. There, at 2020, the horizontal support will intersect the currently most important Support Angle in 3 weeks. At 2020, the presently strongest down magnet for the index is situated. At the same time, this is the strongest weekly support.
If the due correction from the 2080-2085 surroundings is anyhow able to reach the 2020, By all means, this support area will be expected to develop enough up-power, so at least the 2119 will be attained until year end. At 2020 – in case of being reached – the market will have to be bought at the beginning of December!
==> Much more likely is only, the 2040 zone being reached as maximum correction target before the next upswing through Christmas and year end kicks off. At 2045-2040, the strongest GUNNER24 Support in the daily time frame is situated…
In the last months, also the NADSDAQ-100 fired off one GUNNER24 Buy Signal after another. Above, for the first time I’m presenting a more of a medium-term applied weekly up setup that makes clear where the leader’s trip should be going till February/March 2015. Since the first double arc was finally broken upwards over the October rally, during the trend moves the lower line of the 2nd double arc will have to be worked off (probability – as mentioned – at more than a 75%).
The setup starts at the important 06/2013 low measuring up to the tops of the weeks 37 + 38 + 39 of the up impulse. This low is important because both tests at the green ovals clearly confirm the existence and significance and power of the bull… there is enormously visible rebound-energy at the 1*1 Support Angle and no close below the 1*1 Angle support!
The three mentioned weekly tops are catchable by the Blue Arc in an ideal way. Thereby and because the performance of the index at the first double arc resistance (see the red arrow at the upper line of the 1st resistance, responsible for the necessitation of the index to swing into the strongest correction in 2014) clearly confirms the validity of this setup, I even consider the 4540 uptarget to have the likeliness to happen until February 2015 of more than a 90%!!!
Let’s go now to the theory that the NASDAQ-100 - and subsequently the S&P 500 and the other major US stock markets of course – are supposed to start their respective 1-2 week corrections in the next respectively at the latest in the week after next:
The current rally will be in its 7th week now. All the past 5 weeks of the rally show higher closings, higher lows and higher highs. Thus we may work on the assumption that the index A) will carry on this pattern and B) will be able and allowed to produce an intermediate high, according to the Fib count at the earliest in the 7th week, technically not before the 8th week of the rally. Ergo, this intermediate top is to be expected in the week after Thanksgiving, at the beginning of December…
In the 3rd week of the rally, the index did not only break upwards the 1st double arc finally, but simultaneously the Support Angle, identifiable in the chart above (watch price action at the two blue circles) could be re-conquered. A double weekly buy candle was timbered in the chart. Thereby, the lower line of the 2nd double arc was activated as target. Therefore, the Support Angle is presently strong weekly support. If it happens to be reached during the possible correction = 4160(!), it will be a perfect entry point for the rally into the year close.
The re-conquest of the Support Angle makes necessary now the Resistance Angle to be reached. This one is not reached yet however! The index is in the battling distance to the Resistance Angle. It is quoting narrowly beneath. In addition, next week the market will attain the next important time line where we may always suppose an important top (respectively low) to be formed. Next week – week # 7 of the rally – at exactly 4303-4310 altogether three important GUNNER24 Pivots will meet thus forming a strong point of attraction = strong magnet = strong resistance. The 3 we are talking about are A) the important time line, B) the Resistance Angle and C) the horizontal that comes from the intersection point of lower line of 1st with the starting point of the setup.
For the 7th rally week, at 4303-4310 is thereby the preferred area where the momentum should change. If in deed the index does not want to begin declining before the 8th rally week the downswing might start at circa 4320. Then, the Resistance Angle will be there, having the important time line and the 4303 horizontal resistance still enough influence – I mean resistance influence - to make the market turn then and from there downwards.
Price target of the correction would be the first backtest of the Support Angle at 4160, that is assumed to be worked off within 10 trading days after the 4302-4320 intermediate top. There, at the Support Angle and at the 4160 surroundings, the rally is expected to gather pace again to head for the 4540 relatively undisturbed at the latest till the middle/end of February.
„As far as I know“, the GUNNER24 Forecasting Method is the globally unique and only technical analysis tool that deals intensely with the comportment of the market at support and resistance marks being able to combine that with price predictions. You’ll learn everything on these really “secret” facts in the Complete GUNNER24 Forecasting and Trading Course. Order now!
Be prepared!
Eduard Altmann
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