carseller

This Is The Bottom For Stocks

300 posts in this topic

Why's that then?....... I'm revising my gold forecast though. So what's your thoughts about where the Dow/S&P/FTSE are going next?.

I would love to share my astonishing insights, but it's still looking like an overdue correction in an ongoing bull market.

We may or may not struggle on until after the US election.

Metals, miners haven't put in higher highs yet, and they're looking irrationally overbought near term.

This latest dollar bounce (last 2 weeks) doesn't look especially inspiring, though it may continue as it did in May. If it continues we'll have an October sell off, but I suspect it may relapse a bit further before that happens.

Risk on doesn't look a good bet here (I include gold in the 'risk on' category now as it's clearly no longer a hedge, but a risk/bubble trade)

Bonds look to have legs still. But again, gains upside looks increasingly marginal.

#foolcast

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I would love to share my astonishing insights, but it's still looking like an overdue correction in an ongoing bull market.

We may or may not struggle on until after the US election.

Metals, miners haven't put in higher highs yet, and they're looking irrationally overbought near term.

This latest dollar bounce (last 2 weeks) doesn't look especially inspiring, though it may continue as it did in May. If it continues we'll have an October sell off, but I suspect it may relapse a bit further before that happens.

Risk on doesn't look a good bet here (I include gold in the 'risk on' category now as it's clearly no longer a hedge, but a risk/bubble trade)

Bonds look to have legs still. But again, gains upside looks increasingly marginal.

#foolcast

^ ^ This boy's good!

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The bull market (US stocks only) topped on September 14, 2012 based on my Lindsay work - I'm certain about that. You've also had a 122% gain on the S&P in 3.5 years from the March 2009 lows which is bigger than the 105% gain in the S&P off the October 2002 lows which lasted 5 years, was pre-financial crisis and in the last stages of a massive credit boom.

Do you still think that after a 122% gain in a worse financial climate and government manipulation to keep the markets up causing what I would call 'the QE bubble' that further gains lie immediately ahead? :blink:

Why do metals have to put in higher highs?...... gold as I have shown was already at about the same over-valuation in September last year as it was at the bull market peak in January 1980. The bubble is still bursting so higher highs in metals seems very unlikely unless hyperinflation suddenly kicks in. :rolleyes:

Bonds have dead legs IMO as 10-year US treasuries are due a cycle low in Q1 or Q2, so rates should keep climbing as bond prices fall further.

What stock markets in the world, apart from the US, have still been in a bull market since the 2011 highs?. FTSE has been in a bear market since 2011 and is only going sideways because of the manipulated US markets which are holding it up.

I said metals haven't put in higher highs.

At the time of writing, 30th September, I said:-

it's still looking like an overdue correction in an ongoing bull market.

We're in the correction.

Risk on doesn't look a good bet here (I include gold in the 'risk on' category

Correct on both counts.

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For the bulls (at least in the short term), see the chart below. Originally posted on Bespoke Invest during the summer but I couldn't find the link to the original article.

What's interesting is that the SPX has also followed the average year 4 performance quite closely since this was posted. We've seen the usual summer rally followed by a September high. It suggests that an October correction (as we are experiencing now) is normal and that we should expect a post-election rally.

Election-Year.png

Although the chart below suggests the last 3 of months of an election year are worse on average than during other years.

presidential-cycle.gif

Although probabilities of an increase are good - see table below.

electioncycle.png

Edit: Quite obviously the returns on the 2nd chart don't tally with the 3rd table.

Edited by Crash Buyer

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BBC news announces that all FTSE Ceos will be issued more shares as part of their pay package (sorry no link).

So along with all employees in the UK having to have compulsory private pensions (see my post further up this thread), they really want a stock market boom to get us out of this.

What next ? CGT free on all shares?

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BBC news announces that all FTSE Ceos will be issued more shares as part of their pay package (sorry no link).

So along with all employees in the UK having to have compulsory private pensions (see my post further up this thread), they really want a stock market boom to get us out of this.

What next ? CGT free on all shares?

It's not quite compulsory yet; the govt has changed private sector pensions to auto opt-in instead of auto opt-out, but you can still opt out.

They wonder why private sector employees opt out when final salary pensions have virtually disappeared, annuity rates are a joke and all the risk is on the employee. I had a pension review at work with one of these "specialists", so I asked them to show me their historic fund performance. They could only show me the last 5 years :o and even then they managed to underperform the FTSE excluding dividends. From memory, the TR was under 20%, a truly crap performance. Gives you an idea how bad the fund management and how high the hidden fees are.

So I'm investing my own money instead, taking responsibility for my own future rather than relying on a pension fund manager who is busy skimming off my returns.

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It's not quite compulsory yet; the govt has changed private sector pensions to auto opt-in instead of auto opt-out, but you can still opt out.

They wonder why private sector employees opt out when final salary pensions have virtually disappeared, annuity rates are a joke and all the risk is on the employee. I had a pension review at work with one of these "specialists", so I asked them to show me their historic fund performance. They could only show me the last 5 years :o and even then they managed to underperform the FTSE excluding dividends. From memory, the TR was under 20%, a truly crap performance. Gives you an idea how bad the fund management and how high the hidden fees are.

So I'm investing my own money instead, taking responsibility for my own future rather than relying on a pension fund manager who is busy skimming off my returns.

I had a quick informal poll at work, most people are going to be staying with the contributions when opted in, as it works out less than £10 per month. Multiply this out across the country, and this is a massive underpinning to the stock market. I will opt out as I contribute 6% (matched by employer) into a private pension already (that I manage unit trusts with Legal and General). I suspect 90% of the public enrolled won't bother checking fund performance, but as the amounts are small, they won't bother opting out either. A calculated gamble that is low risk to the government.

I found the links - Pensions auto-enrolment attracts cautious welcome Oct2012 http://www.bbc.co.uk/news/business-19760421

Share incentive schemes boost top executives' earnings Nov2012 http://www.bbc.co.uk/news/uk-20216031

To the rest of you readers - Of course do your own research as this is opinion, and keep one eye on the Gold/Dow Ratio.

Edited by MrTReturns

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snip

A 38.2% fib retracement to correct the whole advance since the bull market started could mean an eventual low of $1265 in gold

Nice chart. By 'eventual' low I take it you mean 'corrective' as opposed to 'post bubble' ?

Post bubble it'll go much lower imo. $500-600, maybe even lower. I'd be surprised if it didn't revisit the $1,000 breakout in a correction though. But It might be brief as was the $695 in 2008. It'll overshoot for sure.

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http://www.zerohedge.com/news/2012-09-25/how-12th-century-mathematician-just-doomed-bernankes-wealth-effect

20120925_fib_0.png

I thought it was worth revisiting this one (even though it was on ZH).

Actual high was 14 Sep (a few days earlier than expected). Assuming the bottom is now in, the next high is due around 45 days from the 16 Nov low (mid-Jan).

The main problem is that they cheated on the 2010 correction, using the August higher low rather than the July low. This would put the whole sequence out of whack of course.

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http://www.zerohedge...s-wealth-effect

I thought it was worth revisiting this one (even though it was on ZH).

Actual high was 14 Sep (a few days earlier than expected). Assuming the bottom is now in, the next high is due around 45 days from the 16 Nov low (mid-Jan).

The main problem is that they cheated on the 2010 correction, using the August higher low rather than the July low. This would put the whole sequence out of whack of course.

Also ignored June '09 correction completely. Feb '10 correction and others.

Excellent example of what ZH does best. It's a bunch of arbitrary lines with some numbers on it.

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Fascinating second chart Catflap. That is a steep rise in the buck towards the end of this year. I suspect you will be proved right. Let's watch with interest.

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sorry mate, didn't mean to push you off the front page, have a bump on me

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This is not investment advice, do your own research.

---

The FTSE-ALL SHARE INDEX

ASX.PNG

If we can clear the red line at the Friday close, I'll stay bullish. But meantime it's time to tighten those stops to lock in any profits.

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Another 2p from me.

Someone asked me on the main forum - "so you think the stock market will increase in value by 30%", I said I don't see why not. It has already gone up by 10%+ at this point in time. The FTSE-ALL share index is now at 3322pts (9/1/2013 was about 3000pts). It might pull back around here, so once again beware and cautious when climbing the wall of worry.

Gearstick action; I can be in one of three stances; Bullish<->Neutral<->Bearish

I wonder if anyone has the same thought process? In my mind, Like a car you cannot go into reverse until you have stopped from forward gear. You can't be bullish and then suddenly be bearish.

These are my forecasts, valid for the next 3 months (just for fun, and not investment advice).

GOLD$ - Neutral stance, until it closes weekly under $1490/Toz I would be bearish, above $1810/Toz I would be bullish.

GOLD£ - Neutral stance, until it closes weekly under £990/Toz I would be bearish, above £1100/Toz I would be bullish.

FTSE All share - Bullish right now, a close beneath 3200pts, I would tighten stops on individual shares and be neutral on the index. Below 2590pts I would be bearish.

SP500 - Bullish right now, a close beneath 1390pts, I would tighten stops on individual shares and be neutral on the index. Below 1090pts I would be bearish.

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Gold forecast remains pretty much on track and the May 14, 2013 now looks like the most likely day because of what the dollar has been doing.

Gold in 2013 compared to gold in 2008 – some perspective of what might lie ahead if the pattern repeats.

2007 to 2008 produced an upward slanting H&S pattern in gold and when the neckline was broken, the low came about 2.5 months later in October 2008 which was a great buying opportunity.

2010 to 2013 has produced a much larger upward slanting H&S pattern in gold and the neckline has just been broken.

May 14, 2013 is the target date I worked out a while back based on the January 1975 to August 1976 decline in gold and using some Lindsay techniques as well.

This date is about 3 months after the recent neckline break and it would mean a big decline of about 29% to 30% – sounds unrealistic until you realise that gold corrected 20% in just 3 weeks from September 6, 2011 to September 26, 2011.

Maybe the low comes later than May 14, 2013 – either way gold looks very bearish to me and George Soros has now turned bearish on gold having been bullish.

If there is a short squeeze on the dollar then gold could accelerate to the downside and provide a great buying opportunity in the months ahead for what is probably the final leg in the bull market like August 1976 to January 1980 was.

I can see that my earlier work on the FTSE/S&P/Dow is wrong but that a top should now be in (with new work) and this means that a forecast bear market low lies on September 23, 2013. This ties in better with what I now see the dollar doing from the February 1, 2013 and a move lasting around 7.5 months.

To summerise, the revised forecast is now:

Gold - a final bear market low on May 14, 2013

FTSE/Dow/S&P - a final bear market low on September 23, 2013

China - a final bear market low between May 21, 2013 and May 30, 2013 (not studied in enough detail)

Looks perfectly realistic. I'm sticking with $1000 and $18 as potential downside targets in a panic.

If USD has a violent upside move then miners, HUI,GDX, juniors etc will be completely massacred.

I don't think we're quite yet in a 1986-1987 scenario but we might be soon. 1987 (or flash crash) type set up is coming into view the higher equities move imo.

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Due a dead cat bounce soon. Beautiful sequence of lower highs and lower lows from the blow off top. Amazing the permabulls have still ramping it all through this period. One presumes it ain't their capital at risk!

Gold itself is very overvalued now relative to these bust miners. Once Paulson's clients start unloading and he's a forced GLD seller it could all turn very nasty very quickly.

Edited by R K

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Last attempt for a top call now that I've got an even better understanding of Lindsay's methods..... hopefully March 12, 2013 is the top. :)

Too late. I called it yesterday morning in t'other thread. B)

#plagiarist.

p.s. there's a link in there to a vid with a cycles bloke called Terry something or other if you're interested. 17.6, 4.4, 2.2. Seemed right up your street.

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Oops!......... still a bull market in the US for a few more days yet it seems. April 9th, 2013 is when all the pieces fit together again so that should definetely be it. It seems the 102 to 113 days count should only have been taken from the 'more significant lows' of either point 10 or point 14.

This will count 957 days from the secondary low of August 26, 2010 and would match the March 10, 1937 top and extended basic advance which was 958 days (1 days difference).

I think you've got the worst case of retrofit I've ever seen. :D

I often have the mirror image of the same problem which is imagining patterns into the future which uses its foundation, the past, as its basis. But I'm far less scientific about that human foible. You've taken it to another level. :P

Edited by Grrrr I'm a tiger

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