The next hot dance has begun

 

By reaching a new June high in the S&P 500 on Thursday, the GUNNER24 Method is now signaling the imminent dissolution of the consolidation phase that has been effective for more than half a year.


I think, that within the next 5 days, at the latest the next two weeks, we’ll know quite clearly in which direction the train is going to leave the station.


Breakout or breakthrough? I don’t dare to predict the dissolving direction. My guts say that the markets shall submerge soon, simply because the seasonal factor (weaker markets till end of July/early August) and the existing GUNNER24 Resistances should keep on representing a too high hurdle for the stock markets the coming weeks.


On the other hand, the long-lasting consolidation comportment of the S&P 500, the NASDAQ-100 and the Dow Jones narrowly below the highs as well as the new all-time highs in the Russell 2000 and the new bull high of the Nasdaq Composite in the course of the week are indicative of an upwards dissolution of the consolidations.


Besides, the NASDAQ-100 is still a little far from its 2000 highs. All the broader US stock-market indexes are able to reach new all-time highs in the current bull run – so just this leader isn’t?? Huh?? What?! That seems to me absolutely illogical!


In the end – as to my assessment – the decisions of the monkeys in Brussels and Greece should have to be the final trigger for the decision where the trip is going in the broader US and EU equity markets next few weeks… and who may know exactly the real intensions of a monkey...


Today, I’m making available to you the current sell- respectively buy-triggers in the monthly and weekly time frames. Ultimately, the market will decide where it is going to. So we shouldn’t speculate whether it’s going up or down.


==> What I’m seeing as matters now stand is that the decision is very near having arisen some profitable trade setups that are likely to be dissolved within the coming 10 trading days!


==> So, there’s going to be urgent need for action, as to my assessment!


Let’s start today analyzing and signaling the monthly time frame. For months, in two different GUNNER24 Up Setups the market has been at decisive double arc resistances. In both setups we can see that the last monthly highs are being marked at the respective double arc resistances.


==> Since these two up setups are signaling SIMULTANEOUSLY that the market is trading at the important monthly resistance with the monthly highs, we know that it is twice harder to overcome these current resistances than it would be if this were put out by only one setup.


==> Ergo, the existing resistances are extremely strong, much stronger than normally!


==> Actually, the existing GUNNER24 Resistances are strong enough to signal the end of this bull market. If the S&P 500 finally bounced from them anyway, a several month down move would become compellingly necessary.


==> On the other hand – resistances are there in order to be taken after all – in case the market takes the current resistances upwards WITHIN THE NEXT 10 DAYS it will rise sharply again till August/September!


The 5 Candle GUNNER24 Up starts just like the immediately following 13 Candle up at the 2009 bear lows:

 

 

The April as well as the May and now the current June highs are at the lower line of the 5th double arc.


The May and the June highs pierced somewhat into the strong resistance zone that is between the lower and the upper line of the 5th: ==> the highs of the last 3 candles reached strong and natural monthly resistance that results from the very first 5 month up impulse arising from the 2009 lows.


==> Since neither April nor May could close above the lower line of the 5th, the lower line of the 5th is confirmed resistance for June. This one is being overcome now if June respectively July can close significantly above the lower line of the 5th ==> a June close above 2130 will activate the upper line of the 5th double arc as next important uptarget (2145) in the monthly time frame.


The 5th double arcs are always main targets in stocks and stock markets. So far, the June candle reached only one lower high (2126.25 vs. 2134.72) compared with May. It did at an important monthly arc resistance.


==> If June keeps on declining, starting from the current lower high, in deed there’s danger of that the market will have topped finally being obliged now to go down! There’s the threat of A) at least a deeper correction respectively B) even a final change in trend.


Just consider now the June low (2072.14). It was marked exactly at the currently most important monthly support, the Support Angle. This next test of the currently most important support including the subsequent bounce into the current June high leads more and more to an approach to a decision by the monthly time frame (breakout or breakthrough) because the June range is increasingly squashing into the space between the lower line of the 5th and the Support Angle – just as the previous ranges were. ==> The market is facing a decision!

 

 

The much more important 13 Candle up – more important it is regarding the signaling and its resistances/supports etc. because it measures up the complete first up impulse from the 2009 bear lows (13 instead of only 5 months) – shows marvelously why the current June high may really be matter of a very important lower high.


So far, the index follows and considers the natural resistance of the upper line of the 3rd double arc at the May and June highs: the May high is exactly at the upper line of the 3rd, just like the June high!


Even much better than in the 5 Candle up, the 13 Candle up shows how the June range squashed between the dominating support (Support Angle) and the dominating resistance (upper line of the 3rd)


The result is now a very obvious and simple signaling as far as the June close is concerned:


If June succeeds in closing significantly above the upper line of the 3rd double arc = June close above 2130!, the next higher resistance magnet in the monthly time frame will be activated as the next uptarget. It is matter of the next higher important GUNNER24 Resistance Horizontal at 2266.


If on the other hand June closes significantly below the Support Angle = a June close below 2065!, the next lower very strong support region in the monthly time frame will be activated as next target. It may be matter of the lower line of the 3rd that should be worked off till July at about 2020 in that case. I think however that a June close below 2065 would rather involve another approach/test of the next lower support horizontal at 2000 respectively even of the Support Angle 2. This one might be reached at about 1950 in August 2015 in that case!


So far, the market has not been able to attain more than a lower high compared with May. That involves the danger that June has topped out now having begun a strong down impulse at 2126.65 last Thursday. The currently most important weekly setup – it starts at the October 2014 lows measuring upwards 8 weeks of initial impulse – makes clear why I’m picking so much on this fact:

 

 

With the 8 weeks up impulse, for the market some important future supports and resistances emerge we can use as signals.


The first magnet I’d like to go in is the 2089 first square line. The market has been using this horizontal as pivot since the end of 2014. It is swinging around it. The last weeks it has mostly traded above testing it over and over however. The last 9 candles closed above the 2089 = first square line is weekly closing base support.


With the very first weekly close above the 2089 at the end of December 2014, the lower line of the 1st double arc was activated as the next important uptarget. At the present June high, and at the high of the last candle, it was worked off at 2126.65 to a T last Thursday.


Technically it’s unusual that working off the lower line of the 1st lasted such a long time, but we have to recall that the region above the 2100 up to the ATH is monthly resistance zone after all that performs like chewing gum – the price may chew away on it, but it’s difficult to bite it through…


Be that as it may… the issue that really counts now deserving our complete attention is that with last week’s high, the current June highs, now also in the weekly time frame an important magnet = resistance magnet was reached and worked off.


As far as the resistances are concerned, the monthly time frame as well as the weekly time frame were in complete concordance at the June high. The monthly and the weekly time frames reached likewise some important double arc resistances at the current June highs. Thus, the so far attained June high may have released a downwards turn!!


This supposition is encouraged by the ominously long upper wick of the last week-candle. It looks somehow like a spike high. Such a long upper wick was last to be seen in April 2014. Spike highs that reach exactly double arc resistances, always signal the threat that a very important top was marked, including subsequent changes in trend!


The fact that at 2126.65 the monthly as well as the weekly time frame are together signaling now an important top does not have to mean anything yet.


The market will have to decide what it wants to do. The present situation of the market in the three up setups shown above makes the signaling super obvious now however:


==> The very first next important signal can be given first by the weekly time frame including the 8 Candle up setup.


Breakthrough-Signal:


==> If the market closes below 2089 the coming week or the week after next, a first sell signal will result. In such a case, the weekly 1*1 Angle at 2035 is supposed to be reached within three trading weeks.


==> A weekly close below 2089 next week or the week after next and the necessarily subsequent reaching of the 1*1 Angle at 2035 will also signify then that the currently most important monthly support (Support Angle at 2072) will be fallen short. Thereby at least the next lower monthly support would be likely to be reached subsequently = 2020!!


==> Prices around 2020 in July will allow the market to go still lower! Maybe 2000 (monthly support horizontal) or even 1950. In the monthly, the 1950 is identifiable as important downtarget for the month of August 2015 (Support Angle 2). In the weekly setup above, the 1*2 Support Angle takes its course at an important time line in mid-August at 1950!


Breakout-Signal:


==> If next week and/or the week after next the market closes for the first time significantly between the lines of the 1st double arc in the weekly 8 Candle GUNNER24 Up = a weekly close above 2130, in the monthly time frame a clear and strong buying signal will result being supported by the weekly time frame.


In such a case, the combined weekly (lower line of the 2nd) and monthly uptarget (next higher GUNNER24 Horizontal Resistance) at 2266 are technically supposed to be reached/worked off till the end of August 2015!


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Be prepared!

 

Eduard Altmann