$DJIA/$S&P 500 Gann Master Cycle Update
US Stock Market Indices heading downwards?
Introduction
Looking at the shorter term and longer term moving averages the US stock market Indices seem to be in a vulnerable position as you can see in below charts on the $S&P500 and the $DJIA.
$S&P 500
$DJIA
In above chart of the $DJIA you will see the Guppy short term averages(3,5,8,10,12,15 day in Blue) and the longer term averages(30,35,40,45,50 and 60 day in Amber). The shorter term moving averages have moved downwards and closed definitely below the longer term moving averages. The last rebound the shorter term moving averages could not close above the longer term. This is a sign of weakness.
Recently the $DJIA has closed below the 200 day Volume Weighted Moving average in green and below the 10 month moving average in red as well.
In above chart I have also divided the price range from 2020 low to 2022 high in eight equal parts, which at each level formed natural support and resistance in the past. The $DJIA already closed 1/8th of the price range lower from top. If we get a serious correction, as I expect from the Gann Master Cycle in play, a 50% correction is to be expected. This is around 27000-28000 and 4/8th of the range (half way) from top.
The US Indices are also 2 years from crest in February 2020 and 2 years from trough of March 2021. If the indices make a similar move, compared to 2020, that will be quite some symmetry.
As you can see from the measured move in grey (based on the 2020 COVID slide downwards, this could still happen. It is a probability to consider with all the tensions around the Russian-Ukraine border. Shorter term measured moves and the Gann Master Cycle favour more downward action into end of February to early March. If this happens I expect a slight recovery from there before, completing an Elliott Wave 2 of some degree, before we move into an Elliott Wave 3 further downwards.
So, be careful as cycles can contract, extend or invert, always watch the chart in front of you. Past performance is no guarantee for future results. No Advice. Our paid subscribers here on Substack receive below forecast based on the Gann Master Cycle a full month ahead. Our customers on Gumroad have received the full year ahead projection in our Stock Market Outlook 2022. On all our analysis our Terms of Use and Disclaimer apply