The United States is immersed in election campaign drama with the standoff between Trump and Kamala (capitalism vs. socialism) before the presidential election in November while World War III is brewing in Europe, the Middle East, and potentially East Asia. The Deep State and sycophants in legacy media have failed to eliminate Teflon Don through lawfare, defamation, and assassination attempts thus far. If they manage to take out Trump or decide to pull another trigger before or shortly after the election, expect it to be blamed on Iran or Ukraine and the war dogs may engage in an orgy of violence the world has never seen before.

Meanwhile, central banks and deep pockets are hoarding huge amounts of capital into safe-haven gold, and Europe’s wealthy have particularly been expatriating cash into perceived safety within the U.S. stock market. The market is frothy around all-time highs (ATHs) which was initially driven by an artificial intelligence mania that poured capital into Magnificent Seven technology equities, then dovish Federal Reserve commentary has shifted monetary policy into a new cycle of cutting interest rates. When the world is faced with unpayable sovereign debt levels, economic misery, and inept diplomacy, history tells that the powers that be will ultimately take us to war. The following interviews with John Paulson, Martin Armstrong, Trump at the Economic Club of Chicago, and Kamala’s disaster with Bret Baier are worth your time.

Froth Is Back in the Stock Market. BofA Calls It a Sell Signal… “The bullish fever is being fanned by… the Federal Reserve rate cuts and China taking major steps to stimulate growth. Sentiment readings like that are a classic contrarian indicator — at a time of maximum optimism, who’s left to buy stocks? Indeed, strategists led by Michael Hartnett call it a sell signal on global equities in their report today.” – Bloomberg, Oct. 16

John Paulson: I’d go into cash & gold if Kamala Harris elected – Fox Business, Sep. 17

 

Gold Pricing in Market Shutdown, Price Controls, and European Capital Flows into U.S. Markets Fearing War – Martin Armstrong, Oct. 10 (timestamp 1:16 to 9:50)

 

Trump Takes On (full version) Bloomberg News at the Economic Club of Chicago – Laura Ingraham, Oct. 16

 

Why Fox News Bret Baier Just Ended Kamala’s Campaign – DeVory Darkins, Oct. 16

 

 

I suggested in my analyses since last December that it was not an ideal time for retail plebes to invest capital in the stock market, but taking profits was okay, and the trading environment was for seasoned and professional traders. Let’s move on to the the Dow, S&P 500, Nasdaq 100, and Russell 2000 charts to see what’s happened since April. Note that a technical analysis with a weekly candlestick chart focuses on potential near-term (a few weeks) trading opportunities for short-term swings or intraday scalps. To view a larger version of the following charts, mouse over and select or right-click and choose a “view image” option.

$DJI Dow Jones Industrial Index weekly chart Oct. 16, 2024 close…

 

Excerpt from the Dec. 2023 close (Twitter thread) weekly chart analysis:

“The dovish FOMC announcement on Nov. 1 launched a rally after printing a low of 32,327 on Oct. 27. The subsequent price action breached the 50 Exponential Moving Average (EMA), the trendline drawn down from Jan. 2022 and the summer of 2023, then the 35,679 lateral resistance and left them all in the dust. The Fed pivot on Dec. 13 turbocharged the rally with a spike above the Jan. 2022 all-time high and printed a 37,779 high last week that’s just shy of a 17% gain over 9 weeks. The Dow closed for the week at 37,690. The Dow is in blue-sky territory with no price history to identify resistance. I included a few Fibonacci Extensions on the chart that provide levels to keep an eye on if the rally extends into 2024. The next upside target is the 23.6% Fibonacci at 38,909. Support rests around the 35,679 lateral. The DMI-ADX is in a bullish Alligator Tongue power trend but hesitating while it digests the recent price spike into all-time high territory. The price is extended well above the 50 EMA, and buy Volume has fallen for the last three weeks. There could be some profit-taking and a breather on the horizon. The chart is bullish, and caution is warranted in the near term.”

Excerpt from the Apr. 30, 2024 close (thread) weekly chart analysis:

“The Dow printed an all-time high of 39,889 in mid-March, and the price action closed today at 37,816. The correction since mid-March has nearly retraced all gains since the Fed’s dovish pivot on monetary policy in Nov. and Dec. 2023. Support rests around the 23.6% Fibonacci Retracement level at 37,239, the Jan. 2022 high at 36,953, and the 50 EMA at around 36,500. The FOMC decision tomorrow will determine the near-term direction in price. The chart is neutral, and caution is warranted if Jay Powell has a hawkish tone at the FOMC presser.”

After the Dec. 2023 close, an expected breather occurred that only lasted for three weeks. Powell’s dovish rally continued into late March then profit-taking retraced the price action to the Dec.-Jan. highs. There was another pullback that followed my neutral call from the April analysis, and the price returned to the late April range before rising again. Another pullback printed a low during the first week of August that was left in the dust after Powell’s dovish remarks at Jackson Hole in late August where banking and finance gray suits hold an annual powwow in the mountains. A new ATH printed yesterday at 43,278, and it closed at 43,077 this afternoon.

The Dow has peeked above the topside trendline of an Up Channel in the last two weeks drawn back to the Sep.-Oct. 2022 lows. Since we are in blue-sky territory, the most relevant support can be found at the Fibonacci Extension levels drawn up from the Jan. 2022 ATH of 36,593. Intermediate support is at the Nov. 2023 lower trendline and the 50 EMA. The DMI-ADX remains in a positive trend, but buy Volumes are falling while the price action has risen since the first interest rate cut in September, which is indicative of a potential pullback in the near term. The chart may appear bullish, but studies are flashing an overbought condition as we approach the 2024 presidential election slated for Nov. 5.

$SPX S&P 500 Index weekly chart Oct. 16, 2024 close…

 

Excerpt from the Dec. 2023 weekly chart analysis:

“The rally is just as prominent and extended on the S&P, but the price action has not breached the Jan. 2022 high of 4,819. Since printing a 4,104 low in late October, the price spiked to a high of 4,793 this past week and is just shy of a 16.5% gain over 9 weeks… Support is around the 4,607 lateral. The S&P closed for the week at 4,770. The DMI-ADX is in a bullish Alligator Tongue power trend but hesitating while it digests the recent price spike that’s extended well above the 50 EMA, and buy Volume has fallen for the last three weeks. There could be profit-taking and a breather on the horizon. The chart is bullish, and caution is warranted in the near term.”

Excerpt from the Apr. 30, 2024 weekly chart analysis:

“The S&P printed an all-time high of 5,265 in mid-March, was just shy of the 38.2% Fibonacci Extension level, and the price action closed today at 5,036 after printing a low two weeks ago at 4,954. Support rests around the 23.6% Fibonacci Retracement level at 4,846, the Jan. 2022 high at 4,819, and the 50 EMA at around 4,710. The FOMC decision tomorrow will determine the near-term direction in price. The chart is neutral, and caution is warranted if Jay Powell has a hawkish tone at the presser.”

The S&P printed an ATH this week at 5,871 and closed today at 5,842. The dominant pattern on the chart is a bearish Rising Wedge drawn back to the Jul. 2023 highs and subsequent low on Nov. 3. There is also a nested Rising Wedge that has developed since Sep. 2024. The S&P is also in blue-sky territory, and support is at the Fibonacci Extension levels, the lower trendline of the dominant Rising Wedge, the 50 EMA, and the Jan. 2022 ATH lateral at 4,819. The DMI-ADX is struggling to remain positive, and the buy Volumes are falling while the price has risen within the nested Rising Wedge, which is bearish and indicative of a potential pullback in the near term. The chart may appear bullish, but studies are flashing overbought conditions as we approach the 2024 presidential election on Nov. 5.

$NDQ Nasdaq 100 E-Mini Futures ($NQ1) weekly chart Oct. 16, 2024 close…

 

Excerpt from the Dec. 2023 weekly chart analysis:

“The bullish Half Staff Flag was confirmed in this rally since the 16,063 lateral and trendline drawn down from the 2021 high were decisively taken out. The subsequent price spike printed an all-time high of 17,165 this past week, which is just shy of a 21.5% gain over 9 weeks from the 14,140 low in late October… Support is around the 16,063 lateral and trendline drawn down from the Nov. 2021 high, and the futures closed for the week at 17,023. The DMI-ADX is in the early stage of a bullish Alligator Tongue power trend but hesitating while it digests the recent price spike that’s extended well above the 50 EMA. Buy Volume remains strong and was much lower over the past week. There could be profit-taking and a breather on the horizon. The chart is bullish, and caution is warranted in the near term.”

Excerpt from the “A.I.-Related Stocks are Bubbling the Nasdaq Part 2” Jan. 31, 2024 weekly chart analysis:

“After a Plunger Candle printed a high of 17,165 in the last week of Dec. 2023 and closed at 17,023, an expected pullback totaled 705 points with a close at 16,460 in the first week of January… Last week’s high printed a Shooting Star (aka Plunger Candle) with a 17,793 high and 17,527 close… Support is found at the 16,767 from Nov. 2021, the 6,350 lateral from early January lows, 16,063 lateral drawn from mid-July 2023 at the Half Staff Flag high, and a fluent price point at the 50 EMA. The next target for a new high is the 23.6% Fibonacci Extension level at 18,271. All the major stock indices took a hit today during and after the FOMC presser. The Nasdaq’s DMI-ADX is still positive but unremarkable vs. a solid power trend setup. The current market is for professional traders that scalp or swing the dips and rallies, not passive retail investors seeking core positions to buy and hold. The chart is neutral in a world full of financial chaos and WW3 rhetoric.”

Excerpt from the Apr. 30, 2024 weekly chart analysis:

“The Nasdaq printed an all-time high of 18,709 in mid-March that bested the 23.6% Fibonacci Extension level at 18,271, and the price action closed today at 17,511 after printing a low two weeks ago at 17,113. Support rests around the Nov. 2021 high at 16,767 and the 50 EMA at 16,345. The FOMC decision tomorrow will determine the near-term direction in price. The chart is neutral, and caution is warranted if Jay Powell has a hawkish tone at the presser.”

The Nasdaq futures have not had a new ATH since the 20,984 high in July followed by a 17,351 low in early August. A rally from the lower trendline of an Up Channel drawn back to the Jul. 2023 highs and subsequent low in October printed a high of 20,680 this week and closed at 20,346 today. A nested Rising Wedge within the Up Channel has developed since the August low, which is bearish and indicative of a potential pullback in the near term. The chart is in blue-sky territory, and support is at the Fibonacci Extension levels, the lower trendline of the nested Rising Wedge, the 50 EMA, and the Nov. 2021 ATH lateral at 16,767. Resistance is at the Rising Wedge’s topside trendline and July’s 20,984 ATH. The DMI-ADX is struggling to remain positive, and the buy Volumes are falling while the price has risen within the nested Rising Wedge, which is bearish and indicative of a potential pullback in the near term. The chart may appear bullish, but studies are flashing overbought conditions as we approach the 2024 presidential election on Nov. 5.

$RUT Russell 2000 E-Mini Futures ($RTY) weekly chart as of Oct. 16, 2024 close…

 

Excerpt from the Dec. 2023 weekly chart analysis:

“Price action on the Russell is nowhere near its all-time high of 2,461, but the rally from the late October low of 1,639 to the 2,097 high printed this past week is a 28% gain over 9 weeks. This week’s bearish Gravestone Doji at the close signals the potential for a pullback. Support is around the 2,000 lateral, 38.2% Fibonacci, and trendline drawn down from the Nov. 2021 high. There could be additional profit-taking and a breather on the horizon. The Russell futures closed for the week at 2,048. The DMI-ADX is in a bullish Alligator Tongue power trend but hesitating while it digests the recent price spike that’s extended well above the 50 EMA. Buy Volume remained strong until this past week, which printed a sell Volume bar. The chart is neutral, and caution is warranted in the near term.”

Excerpt from the Apr. 30, 2024 weekly chart analysis:

“The Russell had a shallow pullback following a Gravestone Doji at the Dec. 2023 close and then rallied to a high of 2,167 in early April after briefly piercing the 61.8% Fibonacci level at 2,147. The price action closed today at 1,981 after printing a low two weeks ago at 1,916. Support rests at the 38.2% Fibonacci level at 1,952 and the 50 EMA at around 1,945. The FOMC decision tomorrow will determine the near-term direction in price. The chart is neutral, and caution is warranted if Jay Powell has a hawkish tone at the presser.”

The Russell may finally be making a run to challenge its ATH of 2,461 from Nov. 2021. This week’s price action closed at the 2,304 high today, and the most recent high was 2,320 in late July. The dominant pattern is an Up Channel drawn back to the Dec. 2023 high and subsequent low in April. The price action is challenging a blob of lateral resistance around the 2,289 level that’s drawn back to an extended period of consolidation in 2022 that resulted in the Nov. 2021 ATH. Support is at the 78.6% Fibonacci level, 50 EMA, and lower trendline of the Up Channel. The DMI-ADX remains in a positive trend, but buy Volumes may be starting to falter after staying high and steady throughout the Up Channel, which would be bearish and indicative of a potential pullback in the near term. The chart is technically better than the previous three indices covered today, but the Russell is likely to follow any market-wide correction as we approach the 2024 presidential election on Nov. 5.

From a Bunker in Israel, American Empire is Over – Charles Nenner, Oct. 1

 

Plan Your Trade, Trade Your Plan

TraderStef on Twitter / Website: TraderStef.com

Headline Collage Art by TraderStef