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Technical Analysis

Continued Consolidation in a Dominant Long Term Bull Market

by Antonis Benis, on May 14, 2019 3:29:08 PM

Dow Jones Futures

Yesterday’s (May 13, 2019), news related, selloff in the stock markets may have appeared shocking to most of the traders/investors. However, it may also have produced a temporary low in the markets; a, short term, hard oversold condition in a dominant uptrend. TD daily sequential buy setup @ 7 today. Expect a bounce that could last until late next week. Short term, “brave” traders could go long or cover their shorts; the better, less risky trade should be to wait and sell the expected rally. (see chart 1).


DAX Futures

German DAX has a similar technical picture, tops and bottoms with the US indices, however underperforms them. DAX appears to have found support at a very obvious trendline from the late December major low. (see chart 2), which is -most of the times- a warning that lower prices are ahead once the bounce is complete.

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Cycles (see chart 3) suggest a significant bottom in the first part of June, followed by a rally into mid-July and renewed weakness until late August 2019. From there, at the latest, the consolidation that started in January 2018 should come to an end; expect a very strong rally until January 2020 before another correction takes place. On the chart (S&P 500), the green line is long term while the red line is shorter term cycles. Please, note that cycles are all about trend changes, not about the magnitude of the moves.

S&P 500

Crude Oil

Crude oil is also at support, expect a bounce. Longer term, a good support level is @ 58,02/58,27 (see chart 4)


Bottomline: Stock markets are still going through a period of consolidation in a dominant long term bull market. While the bottom of this consolidation must be the December major low, a secondary low should be due this summer (June or August), that should be a major buying opportunity.


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Topic:Trading SignalsActive TradingCrude OilS&P 500Dow JonesDAX
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About this blog is a personal finance blog. The articles posted provide relevant trading information, aspects, and opinions from expert professional traders and data and analytics providers.

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