Evidence of an Important Top in Stocks is Mounting (for now)

In my analysis there is mounting evidence that an important top is likely being made in stocks. Some of the secondary indexes like the Russell 2000 and Nasdaq have been weakening and leading to the downside, while the DJIA and S&P continue to be levitated near the highs.

Posted below are charts with some additional analysis annotated on each chart. Some of these are updates to charts and analysis posted earlier, with recent market action confirming the prior analysis; i.e., the megaphone patterns in DJIA and Russell 2000 are still valid. As noted on some of the charts, it's too early to tell if the tops are actually in yet, so breaches of the highs should be respected for possible runs to higher targets. The very long-term chart of the DJIA has what I believe to be very compelling analysis, showing a triple confluence at current highs. The projections are from the 1929 top and 1932 low, the 1937 top and 1973 top, and the 1974 low. These are some of the most important swing points of the last century. I've posted some analysis on this in the past, but I've made some adjustment to the projections based on the premise (my premise) that the 7/8/32 low of 40.56 printed in the historical record is probably not correct. Based on the geometric structure and relationships with other major swing points over the last 100 years, I know this is a brazen assumption, but I believe the actual low on that day in 1932 was 37.69. On log scale analysis, this makes a significant difference in long-term projections from that low.

Not included on the charts is the current astro set-up. With the recent passing of the Grand Cardinal Cross followed by a new moon and solar eclipse on the same day, we'll see over the next few weeks or months if any significant price destruction occurs. In past major astro setups, like 1987 for example, there was a fairly similar signature in the heavens that preceded the crash by several months. I suppose it's fairly unlikely to happen in the next few months (mainly because most crashes tend to occur in the Fall), but it is something to be aware of just in case.

Kim Rice 5/4/14