Our research now shows a very strong rally setting up for the broader markets through the end of the year and into 2015. After several weeks of churning in a very tight upper support and resistance channel the broader market indices DJIA and S&P 500 are poised to breakout and make a final sharp melt up move higher for the remainder of 2014 and into early 2015. This final breakout move into 2015 will then set up a 20%+ correction that will commence and not end until sometime in early 2016.
From these current levels we are expecting a 50 day retest to occur very soon perhaps within the next few weeks. If we move closer to November without as little as a 50 day retest, a deeper 200 day retest will become less and less likely. With that said a possible retest of the 200 day moving average will continue to be in play between now and the end of October, and that could ultimately be the rubber band or catapult effect that drives the market into much higher territory through the end of the year and into 2015. Either way our research shows the end result will be a very strong year end rally.
The final breakout move into 2015 will then set up a 20%+ correction that will commence and not end until sometime in early 2016. This will mark the final year of a 17 year consolidation phase that started in 1999 for the DJIA. This will also mark more broadly the end of a third such consolidation phase for the DJIA over it’s roughly 128 year history. This broadest historical perspective for us plays a critical role in determining and simplifying what the broader markets will do over the next 20 years.
This coming week we’ll continue to broaden our strategy beyond 3 to 10 day short term stocks and offer many additional alerts to hold into the end of the year. Although we remain positive we’ll remain on the cautious side looking for any possible weakness or sudden change of direction in the broader markets.
Starting in October we’ll start to put together three different lists of Small cap, Mid cap and Large cap January effect stocks. If done right this is always a very profitable exciting way to start a new year. Check our Tradereversal website front page for details and updates and our final list of stocks in late December.
For more of our forecasting and market calls please review our previous broader market research updates and Chat commentary timelines via our Tradereversal APP and or within our blog section at Tradereversal.com
Have a great week.