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A Stock Market Cycle Trend Turn Window

April 19, 2021

There is a Fibonacci Cluster Turn Window scheduled for next week, from April 20th through April 28th, 2021 +/- a few days. Significant trend turns often occur when Fibonacci Numbers of Trading Days and Ratios converge into a narrow short-term period.

Before we get into the details of this coming trend turn period, let’s take a look at the last time there was a Fibonacci Cluster Turn Window.

Above is the previous Fibonacci Cluster Turn Window chart we presented to subscribers back in January 2021. In fact, the stock market bottomed on January 29th, 2021, solidly inside this cycle turn window, at Dow Industrials 29,856.30, and then rose sharply through 34,200 now, with two pauses along the way.

 

In the above chart, we show that there is another Fibonacci Cluster Turn Window scheduled for next week, from April 20th through April 28th, 2021 +/- a few days. From this coming Tuesday, April 20th, through the following Wednesday, April 28th, there are 6 different prior significant tops or bottoms that are precisely a Fibonacci number of Trading Days from one of the days in this coming 7 trading day window. This suggests a trend turn of significance is likely to begin in the next week or so. Because the stock market has essentially risen almost parabolically in the last several months, this is likely pointing to a top and new declining trend. Here are the details for the coming turn window:

  • April 20th is a Fibonacci 55 Trading Days from the January 29th, 2021 Bottom.
  • April 21st is a Fibonacci 144 Trading Days from the September 23rd, 2020 Bottom.
  • April 21st is a Fibonacci 1,597 Trading Days from the December 16th, 2014 Bottom.
  • April 22nd, is a Fibonacci 34 Trading Days from the March 4th, 2021 Bottom.
  • April 26th, is a Fibonacci 21 Trading Days from the March 25th, 2021 Bottom.
  • April 28th, is a Fibonacci 610 Trading Days from the November 23rd, 2018 Bottom.

The fact all correlative prior dates are bottoms is a coincident, and likely not meaningful. The fact there are six prior tops a Fibonacci number of trading days from the 7 days coming up is significant.

There are a few other developments that are warning a stock market top is close at hand.

The S&P 500 has formed a worsening Bearish divergence with its Demand Power measure, and also its 10-day average Advance/Decline Line Indicator, suggesting a top is approaching. The NASDAQ 100 has also formed a Bearish Divergence with its 10-day average Advance / Decline Line Indicator and its Demand Power measure. There is also a Bearish divergence between the Secondary Trend Indicator and the S&P 500.

There is a Hindenburg Omen potential stock market crash signal on the clock. It is a two-observation signal so far.

Also, the VIX is poised to rise sharply, which would coincide with a strong stock market sell-off. The VIX has formed a Declining Bullish Wedge over the past six weeks that is close to completion. This suggests the timing for a strong rise in the VIX is close at hand.

As for Gold, Gold broke out sharply above its 50-day moving average this past week.

Our HUI key trend-finder indicators remain on a Buy signal as both the HUI Purchasing Power Indicator and the HUI 30 day Stochastic are on Buys. It is possible that with the HUI Buy signals, that Gold has bottomed, and is now rising out of the corrective descending expanding triangle pattern formed over the past six months.

Silver looks to be forming an Ascending Bullish Triangle pattern for its corrective wave 4.

At McHugh’s www.technicalindicatorindex.com we track the short-term waves that make up these larger degree trends, and chart them in our forecast newsletters, and have developed several proprietary Buy/Sell indicators that help us identify when the next significant move is starting for the major stock indices, as well as Gold, Silver and Mining stocks, and in which direction the move will develop. We publish these indicators in every Newsletter to subscribers.

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The California Gold Rush began on January 24, 1848 when gold was found by James W. Marshall at Sutter's Mill in Coloma.
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