Gann Master Cycle update

US Indices: $DJIA, $S&P500, $Nasdaq Composite may continue in a downtrend

Introduction

Back from holidays and this week I will start updating de substack site on all major asset classes. I hope all US subscribers enjoyed the independence day and perhaps a short break away from the markets with family and friends.

Today I was looking into the major indices and US stocks and too me there is still arguments the markets could go further down.

Although the 60 year Gann Master Cycle low has made its low, there are still other cycles, like the 90 year cycle who made a low on July 8th, and the 20 year cycle. You may want to read last weeks post on this here again.

It looks like there is still a 30% change that a low is still to come. Using the Andrews Pitchfork it seems to me that the major indices are trading towards the 50% midpoint of the COVID crash channel.

In below chart you can see it on the Russell 2000 Index, which is a broad index of the major stocks around the world.

I have drawn in above chart an Andrews pitchfork from December 2018 low (A) through the February 2020 high (B) and March 2020 low (C). The midpoint line is the 50% midpoint between B and C. As Cycles by nature go around the mean average line, I will not be surprised if on the short term we will find support at this point for some time. Longer term we may hit the lower channel line on a 4 year cycle low somewhere in October 2022 - January 2023.

Currently the Russell 2000 is trading below all VWAPS from important pivot points and below its 5 day moving average (Blue). Only when we cross these levels I will become more Bullish.

The paid subscribers can read further from here on the latest Gann Master Cycle dynamic updates.

Hypothetical or simulated performance based on past cycles have many limitations. Cycles can contract, extend and invert. Hence, past performance is no guarantee for the future. Read our disclaimer.