Within the free GUNNER24 Forecasts, issue 02/14/2016, we identify that the S&P 500 should have begun a bounce at his 1810.10 downtrend low, because a double bottom and a bear trap appeared with the downtrend low. The bounce is supposed to:

==> end either within 10 trading days (2 weeks of bounce) at about 1888 or - at the latest - after 4 weeks (20 trading days) at about 1940.

If however:


==> The 3rd week of bouncing still denied a weekly close above 1950. The week closed at 1948.05... On Friday – in its 4th bouncing week – the S&P 500 finished clearly above the 1950 resistance with 1999.99.

Therewith, the chances for the US stock markets to deliver their respective 2016 year lows in February rise signally. Since the bounce according to price and time has lasted longer and gone higher than it was technically supposed to, with a 20% of probability the S&P 500 is allowed now to test back very seriously its all-time high till June or even go to excess.

I’d like to dedicate today’s issue to the NASDAQ-100. With its help, we can evaluate pretty surely the moment when we should switch into the confirmed bull mode resp. where the trigger is localized to change sides swinging newly into the confirmed bear mode.

Furthermore, for the coming week a rather promising NASDAQ-100 short-entry at 4372 is advisable, since that is where after a 5 week term the bounce should come to an end for the time being. In succession, this index and all the other US equity indexes also should/would have to test back some important supports, of course.

We start the analysis with an important review serving the comprehension of the present situation and the clarification of some existing important resistances:


Above the currently most important setup for the index. With its help, on 01/10/2016 we could realize what the market’s plans were like, where it had to go and where the triggers for short or long were and are. Well, everything that worked and was valid in the past should have to apply and become important for the future as well.

==> We perceived that at the upper line of the 3rd double arc a Kiss of Death ensued. That’s where the current year-high 2016 was marked on 01/05.

==> Ergo the upper line of the 3rd is a future resistance in the extremely important yearly time frame. The upper line of the 3rd double arc is combined weekly + yearly + monthly (high of January 2016) time frame!

Der Kiss of Death activated 1st, 2nd and the 3150-3100 max. downtarget for the current correction. It’s always at the final break of the respectively higher target where the relative targets are finally confirmed…

2nd correction target was the 3950 at the 2013 1*2 Support Angle and at the 2015 1*2 Angle, likewise an important support angle because it can be derived directly from the low of the year 2015.

Now the actualized 23 Candle up:


==> The 2013 and the 2015 1*2 Support Angles stopped the market impressively at the 2nd downtarget. Certainly, the absolute correction low was at 3888.78 (low of green # 1), but we see how important the combined yearly support of the 2013 and the 2015 1*2 Support Angles is.

The green # 1 downtrend low week opened exactly at the 2015 1*2 Support Angle. The 2013 as well as the 2015 1*2 Support Angles stopped the market on closing base initiating the current bounce that will be in its 5th, next week.

Thus, the combined yearly support the 2013 and the 2015 1*2 Support Angles point up is the trigger mark to be fallen short in order to reach/work off the max. downtarget of this correction (3150-3100 till July/August 2016).

==> A weekly and/or a monthly close below combined yearly 2013 + 2015 1*2 Support Angles will confirm the 3150-3100 area finally as likely main downtarget for the current correction.

Since the bounce will be in its 5th week on Monday = Fib number turn date and because of the extremely overbought readings, technically it should top out now finally, within the next 5 trading days to test back afterwards some important supports during the coming couple of weeks.

It’s the important upper line of the 3rd double arc, the presently determining year resistance that is downright offering itself as final natural target = backtest target for this bounce!

Bounce week # 3 closed above the lower line of the 3rd double arc thereby making the upper line of the 3rd double arc most likely to be reached. Bounce week # 4 succeeded in re-conquering a former Resistance Angle, now “Support Angle”. This is a slight buy signal. I think, - the index will have to reach the main resistance at about 4372 in week # 5. There, an extremely profitable and very riskless short-entry offers itself, since we always have to work on the assumption that a year resistance bears for the time being – above all under these overbought conditions, most of all being supposed to lead to a strong rebound.

==> Short at 4372 with main target 3960. This is another test of the combined yearly 2013 + 2015 1*2 Support Angles. The 3960 may be reached worked off till mid-April 2016.

Such an outcome is also confirmed by the valid 3 Candle weekly down setup starting at the final year high 2015:


Before the Friday trading, I already presumed the 1810 low of Thursday to be a bear trap, simply because it looked as if the magnetic force were not able to finally crack the 1820. Since the magnetic effect of the upper line of the 1st was literally in its final throes only having left Friday for influence the market – but the US stock futures and the EU stock markets being mightily green already the resistance influence of the upper line of the 1st seemed to be finished with the 1810 low of Thursday.

==> When we can identify that a magnet with past influence on the market over months – mainly in a negative way – having driven and forced it into important lows = potential double low 2016, now has lost its influence, a bounce has to be imminent.

Since the 1st is matter of a weekly magnet, the bounce will have to be imminent in the weekly time frame as well. So it will have to be ongoing 1, 2, 3, it may even last 5 weeks. Since we work on the assumption that the correction in the monthly time frame cannot have finished yet, this bounce will have to come to an end in terms of price at an important resistance magnet.

==> A look at both weekly charts makes clear that the logical target of this bounce will have to be the 1890-1880. That’s where the 1*1 Resistance Angle proceeding from the ATH takes its course, for next trading week at 1890 (1 week of bounce) and for the trading week after next at 1880 (2 weeks of bounce). The ATH 1*1 Resistance Angle in the weekly time frame thereby confirms with the 1888, the most important yearly resistance of the month of February 2016.

As soon as the bounce succeeds in closing February 2016 above the 1888, it will therewith have to run into the 1940 region within 4 weeks, because in that case it would overcome the combined weekly + monthly + yearly resistance. 1940 is strong future horizontal resistance in the weekly time frame!


Be prepared!

Eduard Altmann

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