Related Topics
Stocks , US Markets
Share This Page         

How a Fractured Stock Market Tells You What's Next

Tech giants and broad stocks have been going in different directions for a while (until now)

by Bob Stokes
Updated: August 06, 2019

Volatility has certainly picked up in the stock market, and most mainstream pundits are blaming the new tariffs that the U.S. will impose on China (CNBC, Aug. 2):

Stocks fall on trade war fears, sending the S&P 500 to its worst week of 2019

But, let's go back to Monday, July 29 -- before those new tariffs were announced. The main stock indexes closed mixed, with the DJIA slightly higher, and the S&P 500 and NASDAQ slightly lower. The volatility had yet to kick in.

Plus, remember that it was as recently as July 16 that the DJIA had hit a new record high of 27,398.60.

With that as the backdrop, on July 29, our U.S. Short Term Update pointed out one reason why the broad market might soon be in for a rocky time:

FangFailConfirm

The S&P 500 has already rallied to two new highs since the Dow reached its July 16 extreme, [yet] multiple Intermediate-term non-confirmations signal a fractured market advance... The vaunted FAANG stocks--Facebook, Apple, Amazon, Netflix and Alphabet's Google--are diverging relative to the S&P and Dow.

The chart shows the NYSE FANG+ index, an equal-dollar weighted index consisting of the aforementioned stocks, the supposed leaders of the bull market. The index topped in June 2018, made a lower high in April 2019 and a still-lower high this month.

Our subscribers know: a fractured market is not a healthy market -- hence, it's usually a sign that trouble is afoot for the main indexes.

And that is exactly what happened.

After slightly lower closes for all the three main indexes on July 30, the DJIA dived 334 points on July 31. That was followed by a negative 281-point close on Aug. 1. Stocks were in the red again on Aug. 2, and even more on August 5.

Our analysis routinely focuses on factors many mainstream market observers overlook.

Learn what those factors are saying now about what's next for stocks. Look below to find out how.

How Long Will the Increased Stock Market Volatility Last?

The week ending on Aug. 2 was the worst for the S&P 500 index in 2019.

Naturally, investors are wondering if this is the start of a prolonged downside move, or -- just a temporary blip.

The Elliott wave model offers you insight.

Find out what our Elliott wave experts are saying via a 30-day, risk-free trial. Learn more below …


Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:

 

1

Subscribe now and read the current issues within FFS.


 

2

Fine-tune your portfolio plan.


 

3

Relax. Watch the markets with your targets in mind.




Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns


Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:



Here's what you get with the Financial Forecast Service


Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

Three Days Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.


You can be ready for risks and opportunities that catch most investors by surprise


Risk-Free, Start Your Subscription Now

$69

for 1 month of unparalleled market insights