Stock Market Continues Rebound off of Intermediate-term Low

| March 5, 2016


In January, our computer models predicted the likely formation of an intermediate-term low in the stock market. After retesting that low in February, the S&P 500 index has advanced strongly during the last 3 weeks, confirming that the latest intermediate-term rally is in progress. Following the transition to a bearish translation in August of last year, the intermediate-term cycles have become extremely violent, and the character of the current rally will provide the next assessment of stock market health.

The stock market has been forming a massive distribution pattern since early 2014 and it remains likely that the cyclical bull market from 2009 is in the process of terminating.

As we often note, a long-term top is a process, not an event. The next development that would essentially confirm that a new bear market has begun could occur in March, so it will be critical to monitor market behavior closely during the next several weeks.


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In January, our computer models predicted the likely formation of an intermediate-term low in the stock market. After retesting that low in February, the S&P 500 index has advanced strongly during the last 3 weeks, confirming that the latest intermediate-term rally is in progress. Following the transition to a bearish translation in August of last year, the intermediate-term cycles have become extremely violent, and the character of the current rally will provide the next assessment of stock market health.

The stock market has been forming a massive distribution pattern since early 2014 and it remains likely that the cyclical bull market from 2009 is in the process of terminating.

As we often note, a long-term top is a process, not an event. The next development that would essentially confirm that a new bear market has begun could occur in March, so it will be critical to monitor market behavior closely during the next several weeks.

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Category: Commentary, Market Update


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