The Dow, NASDAQ, S&P 500 and Russell 2k are in red signal line testing mode. These indexes should bounce off the red signal line within the next two weeks. Should these indexes drop below the red signal line on the Harmonic Stock Clock, a Bear Market Correction (BMC) could cumulative into an 18-20% sell off on stocks that comprise the indexes. The key signals to watch over the next few weeks are the treasury inverted bond yield and the 10 year bond reaching a high over 5% before the Fed raises rates once again at the end of the month.
New Dow Jones Index Forecast: high 11208, low range 10786, total points 422.
New NASDAQ Forecast: High range 2333, low range 2241 total points 92
New CRB Index Forecast: High range 339 low range 315 total points 24
New S&P 500 Forecast: High range 1303, low range 1259 total points 44 points
New U. S. Dollar Forecast: High range 91 low range 89.3 total points 1.7
New Russell 2000 Index Forecast: High range 749, low range713, total points 33.
New Gold Index Forecast: High range 574, low range 538 total points 36.
New Oil Service Index Forecast: High range 212 low range 182 total point range 30
This week is the anniversary of the NASDAQ reaching an all time high of 5000 points. After 6 years, the market is barely up 50% off the lows in 2002. This should inspire profit taking, especially during option expiration week. I am expecting an 18 to 20% market wide correction within the next 2 weeks.
The other possibility is a market short squeeze, pushing the Dow Jones Index to new highs around 12,400 points. The market internal have been weak all week compounded with geo political concerns, mad cow, bird flu, and the uncertain future direction of the Fed with it's continual rate increases.
God Bless
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