Gordon T Long

Gordon T Long

Global Macro Research | Macro-Technical Analysis 

MATA: PATTERNS & PIVOTS

 

IS A 200 DMA OVERHEAD RESISTANCE TEST IN THE CARDS?

 

  • BASIS OF PROJECTIONS:

    • “EVENTS” with a beginning and an expected end like the Coronavirus often are spikes in the market and typically exhibit “V” bottoms when the news turns positive.
    • “V bottoms” are also characteristic of Bear Market Counter Rallies! So how do we tell the difference? By Understanding “Events” versus “Processes”.
    • “TOPS” and “BOTTOMS” are “PROCESSES” that signal important Trend Reversals.
    • Tops normally show the form of “M”, Head & Shoulders or Dooms. Bottoms are often “W” in form. The outside strength of the “M” & “W” can and does distort their symmetrical legs. Elliott Wave Analysis helps determine this distortion within the process by focusing on Price, Time AND Form.
    • Our Analysis suggests we are presently in a Corrective Intermediate Down Trend (the red ABC below), within a Longer Term Primary Up Trend
    • Much of what is highlighted below aligns with our expected “Value” migration which we have previously outlined in our 2020 Thesis Paper and February’s UnderTheLens and LONGWave videos.
    • We are presently experiencing a major, multi-decade “Stabilization Test” which we highlighted as coming sometime in 2020 in our recent Three Part Macro Analytics Video Series.
A POSSIBLE PROJECTION ONLY
 
Our current thinking based on the above Event v Process outline in concert with our Macro Research suggests the following patterns have a highest probability of developing. These  charts must continuously be assessed in concert with the real time TRIGGER SECTION index charts on the MATASII site for Time & Price developments.
 
A 200 DMA TEST IS  CRITICAL TO WATCH
 
We have put in a major “Death Cross” where the 50 DMA has crossed the 200 DMA. We need to be watching the 100 DMA to see whether it crosses the 200 DMA and confirms a deeper corrective consolidation is ahead. That tracking is best tracked with you MATASII subscriber chart and live desktop link:
 
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CURRENT S&P 500 PRICE & TIME
 
 
THE SHORT TERM PATTERN EXPECTATION – The 200 DMA TEST
 
New Cases began De-Acceleration with the Global Sunday results. This also showed in the US and NY City Area.
 
 
We would therefore expect the S&P 500 to soon attempt a test of the falling 200 DMA. This test  will be based on the expected peaking of the Coronavirus being reached. Markets always react in advance. It is our current sense that this will occur when the US witnesses its 3 DMA of new cases begins a movement towards a 5 DMA Cross.  if our view on this changes our tracker Trigger will be adjusted accordingly.
 
This tracking is available with MATASII’s custom tracker. The tracker shown below can be found with its live link.
 
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Text content

 
This will trigger red wave “c”.
 
 
LONGER TERM PERSPECTIVE
 
Our Macro research strongly suggests that the Coronavirus has destabilized and already fragile, unbalanced  and historically over leveraged global financial system. This will force markets to find support at lower levels which result in the repricing of risk and more effective price discovery despite the massive monetary & fiscal stimulus measures be brought to bare in an attempt to mitigate the expected damage.
As a consequence we are likely to see the following pattern unfold:
We have highlighted since last fall how the markets were tracing 1929, 1986, 2000 Y2K and the NASDAQ 2008 charts. The analogy including the timing of the February market crash have been quite eerie.  Our  above analysis suggests these historical analogies will continue to be followed. Here is another set of analogies which include the Nasdaq 2000 and the Nikkei 1989 crashes.
 

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