Triggered by the very important 55th rally day Fibonacci number time magnet, the stock markets have now swung into their expected correction or extended pullback, which I call the summer correction for simplicity's sake, because the downward movement that has now begun is likely to last into July, before higher 2020 highs can be targeted:
The start into the summer correction was certainly rough for the markets, but this doesn't negate the uber-bullish May settlement in the NASDAQ tech indexes, S&P 500 or the Dow Jones Industrial Average.
A very special trigger for the first sharp downwaves starting this week are certainly the previously over-inflated tech shares, whose main indices, the NASDAQ-100 and the NASDAQ Composite, had to reach and even dent the magic band of 10000 index points by all means before selling was allowed to start.
All the FAANG`s Facebook, Apple, Amazon, Netflix and Google = Alphabet are Darlings of the Institutional Investors and the Wall Street and they were mainly responsible for the surprisingly bullish recovery of the stock market indexes after the March coronavirus sell-off as they benefit economically above average from the worldwide lockdowns, the social isolation and the associated increased internet usage.
Yes, and even this phenomenon we have to state. These 5 most popular and best-performing American technology stocks in the market, together with Microsoft, Tesla and probably also NVDIA, are able to pull the global stock market car out of the deepest mud, if necessary..., or if the Fed says so.
As from my point of view the developments and movements of the FAANG shares have become even more important now that we live and trade and invest in the age of the coronavirus, I would like to dedicate an issue to these Leaders today to help us to foresee this summer downswing.
I will start with the Apple analysis, which will show that Apple is still in it`s powerful rally mode, implying that the summer correction likely will be what it should be, just another small bump in the powerful uptrend of the NASDAQ-100 und des NASDAQ Composite. Because this is always true: „As Apple goes, so goes the market...!"
The other`s: Facebook, Amazon, Netflix and Google should now have some problems breaking through the hurdles they have piled up for themselves, what clearly indicates that this summer correction is likely to be more substantial than some people might imagin.
All 5 following individual monthly GUNNER24 Up Setups start at the major lows of the year 2018, the famous Xmas lows, what have been the next higher important lows of the DECADElong bull market of the tech stocks. The most recent important higher bull market lows are those of March 2020.
AAPL monthly 8 Candle GUNNER24 Up:
Classic and textbook monthly 8 Candle up. After the lot of pinpoint testing of important GUNNER24 Rails in the monthly chart highlighted with the blue, orange, red and smaller dark-green arrows we can be very sure that the signaling of this setup is above-average secure!
After 100% exact backtest of former upward broken Blue Arc rail at 2020 low and blue arrow AAPL went through the roofs with May 2020 candle for the first time closing above 2nd double arc, former main resistance. This very first close above 2nd activated the test and work off of lower line of 3rd GUNNER24 Uptarget in further course of 2020. This outcome has now a +85% likelyhood as current June made higher year highs and a new alltime-high (ATH) that is close to that lower line of 3rd monthly uptarget.
This week ATH is printed at 354.77$ and this is test of 350$ number rail. This 350$ test from below could trigger a relative severe summer correction that has ideal backtest target exactly at the round 300$, perhaps due for the July 2020 lows!
There at round 300$ forms huge triple support magnet (Rally Angle & round 300$ natural support & 2nd support double arc cushion) for the summer months and I recommend buying AAPL shares at 300$ if reached in further course of 2020 as the main target for the year 2020 is now the lower line of 3rd double arc what resides near the 370$ towards end of 2020.
The AAPL is in full rally mode and after important May 2020 GUNNER24 Buy Signal looks and behaves strong like an Ox! Therefore, a possibly due pullback into 300$ looks like a gift for us, Institutional Investors and all the investors what are interested in buying the best company of the world.
==> Because AAPL is on steroids till proven otherwise or 370$ is getting tested in further course of 2020 the upcoming summer weakness cycle should not be as worse as the bearish doomsters who will soon appear on the tape will call it!
However, FB, AMZN, NFLX, GOOGL: WATCH out, we have a problem in going higher! And this may be one of the main reasons why the global equity indices could correct even by a -12 to – 15% into the summer months!
FB monthly 8 Candle GUNNER24 Up:
FB printed higher year 2020 bull market low PERFECTLY at 1*1 Angle support, the main bull market support regarding W.D. Gann techniques.
After April 2020 close was held back and exactly braked by natural Blue Arc resistance the May 2020 delivered a strong double GUNNER24 Buy Candle on closing base as both Blue Arc and first square line resistances have been overcome on monthly closing base.
Such double buy candle usually siganls that at least the lower line of 2nd double arc should be reached within this bull market. However, the first important uptarget of this bull is now double tested negatively at seen May and now printed June 2020 tops.
Lower line of 1st is worked off and this allows that FB has to pullback for the round 200$ in further course of summer! So, perhaps dark-green dotted line into 200$ triple support magnet in course of July, for a perfect backtest of 200$, followed by anohter monthly upswing for the re-test of now reached 241$ alltime-highs and the lower line of 1st backtest magnet resistance at around 235$!
==> After such hard and impressive rally starting at 137.10$ 2020 Low and work off of lower line of 1st important bull market uptarget a -20% corrective move back to round 200$ would be just usual bounce stuff for Facebook in its mega-strong longlasting bull market!
AMZN monthly 7 Candle GUNNER24 Up:
Please watch this situation closely. Til end of the 2009 to 2019 DECADE the bigger round 2000$ threshold became often confirmed main resistance for the shares. And after a the 2020 spike low that re-tested a natural Gann Angle support this major important 2000$ is now overcome decisively within the very, very first early stage of the new 2020-2029 DECADE time frame.
And nearly always when such bullishness arises at the early stage of a new DECADE this means that such stock delivers it`s next longlasting sustainable buying signal. So, now actually the AMZN stock works on the beginning of a next some years-long sustainable bull market after the years 2018 and 2019 have been more or less sideways.
And this is why AMZN with high, high odd has to reach lower line of 3rd double arc uptarget within monthly 7 Candle up and the bigger round 3000$ number upmagnet sometimes into 2022 or so!
==> 2000$ is now decisively overcome within early stage of the new DECADE and therefore 3000$ is a next major bull market uptarget!
But also AMZN reached important natural monthly GUNNER24 Uptarget out of # 1 // 2018 Xmas low at 2722$ June ATH`s and this in a next problem for the general stock market. Shares spiked into lower line of 2nd uptarget and the June candle also trades below the lower line of 2nd after this past week close so far.
This is why we have received some stronger evidence that the entire 2nd and also the individual lines of the 2nd double arc radiate some stronger future resistance energy and in further course the classic pullback into now seriously overcome 1st double arc support area comes true.
==> Summer correction could test back 2200$ to 2150$ monthly 1st double arc support, before a new monthly upcycle usually has to re-test 2500$ lower line of 2nd upmagnet resisatance surroundings in course of autumn 2020, at least!
The NFLX monthly 5/8 Candle GUNNER24 Up Problem:
As I see the things NFLX is best indicator for that the FAANG`s have to pullback now into summer. The underway 5/8 Candle up – tops of # 5 and # 8 are exactly connectable with the circular Blue Arc, former main resistance – offers 3 ugly looking monthly spike highs for the April, the May and this June 2020 candle which are caused by the lines of the 1st double arc = well-confirmed month high resistance lines.
Overcoming that 1st usually is very serious stuff now as bears have shown some sharper clawes! And probably the 1st double arc ATH resistance environment triggers a 2 to 4 monthlong corrective cycle what in its course usually has to test back prices within the first square.
==> A started summer correction easily could test back 365$ surroundings, before a next monthly uptrend could test back 430$ and lower line of 1st resistance backtest upmagnet!
The new ATH`s above the round 400$ automatically have fired the 500$ as next main bull market uptarget! And this is why this threshould could be reached sometimes 2021 to 2022, then when lower line of 2nd likely due GUNNER24 Bull Market uptarget is in sync with the 500$ main number upward magnet.
The GOOGL monthly 5 Candle GUNNER24 Up Problem:
Since 2017 GOOGL is worst performing FAANG member. Is just chopping around since more or less. But bull market is fully intact as since 2018 Xmas Low the 1*1 Bull Market Angle radiates rising bull market main support on monthly closing base. From 2020 ATH spike top into 2020 spike low we measure a 500$ range or so and price in course of 2020 respects and is trading within round 1500$ main resistance and Big Round 1000$, now DECADE support horizontal, IMHO.
Watch this closely: ==> the 1st double arc area within developed monthly 5 Candle up is obvious and strong ATH and at same time month highs resistance area.
The May highs, as current June 2020 highs, have again tested and reached this main bull market resistance and therefore stock perhaps started the next monthly and weekly pullback cycle, what could test back the round 1300$ support number together with combined Uptrend Angle and first square line support magnet in course of summer.
There and then investors should buy the perhaps due 1300$ support magnet backtest, followed by the next upcycle what usually has to test back again the well-confirmed 1400$-1450$ main resistance environment!
Hmm, this behaviour at 1st double arc main support, means this intense testing of the main reisistance of a stock, is mostly the best indicator for that the bull market has to continue for some future higher bull market highs! And this is why GOOGL usually has to do and work off a 1550$ until 2022!
Be prepared!
Eduard Altmann