SP500 – The BIG picture

monthly-sp500-blog-post-1st-nov-2016

 

 

People ask why didn’t we have a 1929 style crash?

The answer is we did – the reason 1929 happened was due to Time cycles but it occurred on the market of favour at the time which happened to be the DJIA, the Dow fell approx 80% from its high in 1929.

Well in 2000 the market of the speculator was the Nasdaq

screen-shot-2014-03-26-at-10-10-22-am

Circa 80% crash! AND VERY, very similar in form to the DJIA 1929 – 1932 crash

What about the 2016 low?

There’s still 2 full months for it to register but its getting tight!

This time round the expectations from 2013 have not panned out great – for example May 2013 time cycles usually start a 3 year bear market this clearly has not happened in the US markets (they have in the UK FTSE100 though)

ftse100-weekly

I stated in a blog post a few years ago it’s highly doubtful that the 2009 low would be met or even exceeded and I’m fairly certain that will still be the case.

Facts are it is absolutely undeniable that since 2000 the cycle changed from up to down, the major turning points of 2003,2007 and 2009 can in bang on time 100% accurate, the next cycle is UP to 2032/34 (double top)

Remember it is impossible to know for certain in advance to what extent a time cycle will move price and it is impossible to predict price in advance with certainty.

The guy I learnt this off when he trades he establishes a position with a trailing stop – He did invest right at the 2009 low but he was out months later! If he knew for certain that from 2009 to 2015 the market would have tracked the 45 degree Gann angle then he would have stayed fully invested during that period and he didn’t he got stopped out in 2009!

 

 

 

 

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FTSE100 – Continued Review

Weekly: DTosc still OB and in OB zone – hence weekly market market action since last post – Too risky to buy when the DTosc is in this position as the high probability move is a pull-back of some degree.

10082016 - FTSE100 Weekly

Daily: DTosc is OB and n the OB zone – a pull back in price is highly likely in the next week or so!

Couple this with the WEEKLY DTosc position and you have 2 time frames calling a overbought position

10082016 - FTSE100 Daily

Odds are on for a pull-back correction of some degree (Impossible to judge the severity) or a sideways market UNTIL the WEEKLY DTosc either enters the OS zone OR makes a bullish reversal UNDER the 80 line (closer to zero the better)

The ONLY thing missing from this market cycle

PRICE DEFLATION

 

Months of price DEflation are the only thing missing from this 17 year market Time Cycle.

I’d fully expect at some point before December 2016 for a bout of pro-longed Price DEflation to occur and possible take us into the next UP market Time Cycle.

Once you understand the Inflationary and Deflationary cycles you can then work out what economic components go inside them.

Many commodity markets are depressed – these are typically what feeds through into the general economy by way of forcing price of items up or down.

Those commodities have Time Cycles of there own – I’ve not looked at them as I’m not interested in those markets, but I’d bet that they’ve topped out and are sinking in price and bottoming around the same time as the stock market market time cycle is drawing to an end = recipe for price Deflation

If this is of Interest to you then I would encourage you to look at the period 1982-2000 the USA markets/economy are fine and look to see what the stock markets did / price Inflation / Credit Inflation / employment / Interest Rates / QE (there was none) / etc etc

Were the stock market crashes pro-longed or quickly recovered?

1987 was a key Time Cycle date – it was the 5 year growth time cycle (1982-1987) that occurs during all 17 yr cycles, the fall was a major event, but it was quickly recovered because the overall 17 yr market cycle was UP.

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There is an Illusion that governments like you to think happens – that they can control the economy, they can’t – it’s the fact that the market Time Cycle in force dictates economic activity, the Illusion comes with the UP periods exceeding the DOWN periods as even during a 17 yr Down period you still have periods of 5 years of bullish markets.

If a government and it’s Central Bank could control an economy then they would ALWAYS achieve the perfect “Goldilocks” economic factors that would keep an economy in perfect harmony with no stock market panics – it simply cannot be done, never, ever.

Japan is a prime example – or are we to believe that the Japanese are an inferior race who are stupid and those trying to run the economy are either stupid or incompetent?  Of course not, they are intelligent people , trying everything to stimulate the economy and get the stock market firing again – It’s the Deflationary Depression they are in that is making them look silly.

The NEXT MAJOR BEARISH market section in 17 years time[2034]

There’s loads of Cycles dates in the next UP phase and those have been previously published on the pages on here and onto blog posts too – please take your time to familiarise yourself with them.

This next UP cycle is as the name suggests UP – refer to a chart of 1982-2000 for an approx view of what it should look like – in essence it will be UP!

So what about the NEXT DOWN cycle then?

Well I’m going to publish what to look for 17-34 years PRIOR – keep a reference of this page to see if its correct or not – it’s not extensive – I’ve published on other posts other KEY dates to watch as well.

Some of the following dates will NOT work out – they’ll fail or not appear – this happens in all the previous sections going back a hundred+ years, its just something that you have to accept, however, many will work!

The market of choice at the moment is the NASDAQ – it’s where all the fever money has gone into of late, prior to the 1990’s it was the DJIA – you need to use charts for the market of the time.- why? Because you need to watch the market where man/woman are placing most of their speculative money, this market will react well to Time Cycles and show you the panic and greed of mankind all reflected in a handy chart of actual market prices recorded and displayed for all to see.

Here’s a table of Timings:

Box 1                 Box 2                 Box 3                 Box 4

09/02/1966        14/05/1969         07/10/1974         18/06/1982   – Chart 1 (1966-1983)

14/01/2000        10/10/2002         11/10/2007         21/10/2015   – Chart 2 (2000-2017)

05/07/2032        04/05/2035         26/02/2041         21/12/2050   – Projected from Chart 2 DATES

23/09/2032        22/06/2035         06/04/2041         25/01/2051   – Projected from Chart 1 DATES
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Can Stock Values Simply “Disappear”?

This is a great reminder as I encountered people who couldn’t understand this over the past few weeks – As you should know I don’t subscribe to the Author’s views on Elliott Wave Theory – just the content of the post.

Can Stock Values Simply “Disappear”? Yes.

And it’s happened before, too — just think back to the 2007-2009 financial crisis

By Elliott Wave International

On Wednesday (Jan. 13) CNBC reported that,

“Almost $3.2 trillion has been wiped off the value of stocks around the world since the start of 2016, according to calculations by a top market analyst. U.S. stocks are now off $1.77 trillion, while overseas stocks are down $1.4 trillion.”

Stocks rallied on Thursday — but then tanked even harder on Friday, which probably made that $3.2 trillion figure even bigger.

But how can that be? Doesn’t money simply move from one asset class to another?

Our readers have asked us this question before — especially during the 2007-2009 financial crisis, when 54% of the Dow’s value got erased in just 18 months.

You may be wondering this, too. Well, here’s an answer — from Ch. 9 of Bob Prechter’s New York Times Business bestseller, Conquer the Crash:

Financial Values Can Disappear

(Excerpt, Conquer the Crash, ch. 9)

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. “The money has to go somewhere … It just moves from stocks to bonds to money funds … It never goes away … For every buyer, there is a seller, so the money just changes hands.”

That is true of the money, just as it was all the way up, but it’s not true of the values, which changed all the way up.

Asset prices rise not because of “buying” per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else — including those who own some of that asset and those who do not — need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer’s, then the value of the asset falls, and it falls for everyone who owns it. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

Anyone who watches the stock or commodity markets closely has seen this phenomenon on a small scale many times. Whenever a market “gaps” up or down on an opening, it simply registers a new value on the first trade, which can be conducted by as few as two people. It did not take everyone’s action to make it happen, just most people’s inaction on the other side.

The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people. At the peak of a credit expansion or a bull market, assets have been valued upward, and all participants are wealthy — both the people who sold the assets and the people who hold the assets. The latter group is far larger than the former, because the total supply of money has been relatively stable while the total value of financial assets has ballooned. When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else.

In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations. The “million dollars” that a wealthy investor might have thought he had in his bond portfolio or at a stock’s peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears.

You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons.

So, the answer comes down to “money” vs. “value.” Financial values don’t move from one asset to another. They can just disappear.


There is no time to waste

Global stocks lost $3.17 trillion in the first 2 weeks of 2016

Were you ready? Are you ready for what’s next?

You can be.

[Urgent New Report] How to Survive and Prosper in this Global Financial Crisis. With global stocks losing $3.17 trillion dollars in the first 8 trading days of 2016 (CNBC), NOW is the time to download this free report from Robert Prechter. This report was adapted from Prechter’s New York Times bestseller, Conquer the Crash. You’ll get a list of “Imperative Do’s and Crucial Don’ts” for surviving and prospering in today’s volatile markets. There’s no time to waste. It’s time you prepare for what’s next, NOW. Read the Complete Report.

This article was syndicated by Elliott Wave International and was originally published under the headline Can Stock Values Simply “Disappear”? Yes.. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

More on the Market

Capture

Ok we’re looking at the chart ABOVE this text – Mid Cycle CRASH/PANIC, followed by market finding a level Circa 50% of the high! Then when the next UP Time Cycle starts – COMPARE ALL the charts!!!!!!!!!!!!!!!!!

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Buy signal

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Relief rally of something more?

Who knows, a buy signal was given – it didn’t meet the requirements exactly but it was very very close, lets see how (if) far it jumps – might be a few decent % gains in it

The market HAS, HAS to be positive at the end of today’s trading, if not the Buy signal was false

Lets see what happens in the days/weeks that follow.

 

 

Recent Market Action

It’s always good to look at the headlines and then look at market action now compared to previous times = NOTHING out of the ordinary!

Capturedow

DJIA

CaptureSP500

SP500

CaptureNasdaq100

Nasdaq100

CaptureFTSE100

FTSE100 (UK)

EVERY market is displaying normal market action, REMEMBER markets do move up and down in decent % gains/losses most of the time – Investors of the past few years have been spoilt rotten by the markets as they’ve mostly risen!

UK Market = FTSE100

Does not look too good, August 15 lows have yet to be taken out so its standing fast so far, but compare it to US markets, If they drop further then expect lower prices on the FTSE100

US Markets for me are still bullish, UK market teetering, but the August 2015 LOWS are still intact = Biased to the long side still, but warning signs are flagging.

Market sections – Familar?

Of course they are – the same Time Cycles cause these market patterns

That is WHY the generic pattern is the same

BEARISH Deflationary Time Cycles first =

DJIA 1897-1917

1897-Dec 1914

DJIA 1965-1985

1966-1982

(more…)

Market Higher for December 2015?

Every man and his dog is looking for some sort of mega crash.

Will it happen?

I don’t think so, a few key tells for me occurred on Friday last week

Capture

Take the Nasdaq 100 Index above – doesn’t really matter which Index you refer to.

My DAILY 5 period Moving Average of the StochRSI (8) signals a high – this indicator is often wrong on highs!

My WEEKLY 5 period Moving Average of the StochRSI (8) signals a flat or down period (Chart NOT shown)

*Edit – IF the market is on a real downer as signalled by the StochRSI Indicator then this is classed as a BEARISH reversal [the position of the Weekly and Daily Indicator positions] PRICE should hammer downwards – if it doesn’t then that signals the StochRSI is wrong

However,

Capture1

Total Put/Call Ratios have been +1 for a number of days

Equity Only Put/Call Ratio has just exceeded 0.75

These readings often signal a period of bullishness in the days/weeks after

Capture2

Sentiment readings are “NORMAL”

We’ve entered into the seasonally bullish period of Thanksgiving to the first few days of January

Most importantly PRICE ACTION has been going UP as can be seen from the chart above.

It would not surprise me in the slightest if we see some form of little pull back and then a continuation of Bullish prices – when the bears are banging and buy tonnes of puts they’re often proved wrong.

Time Cycles – 18th August plunged the market right on cue, The Time cycle expected October could of already printed its name on the August low! Which would sit comfortable on a Bullish December 2015.

Obviously this is all best guessing – let the market tell you it’s movements