Dow Sharp Drop – CAUTION Highly Warranted
The Dow has dropped sharply ever since it elected the first two Weekly Bearish Reversals at 17732 and 17510. The next key Weekly Bearish Reversals to pay attention to today are 16910 and 16680. A closing below both would signal a sharp decline into next week. Holding may warn of a temp low this week.
The timing models show the week of 8/31 as the target for a turning point but next week is a Directional Change. Holding 169100 today will warn we could see a reaction back up before turning back down. A closing below 16680 would warn of a drop to the 15500 area.
Pay attention to gold. Resistance there for the close stands at 1168. A closing beneath that level will also warn that we could see a temp high. Caution is advisable on all markets right now..
Looking at the Array for the Dow, we can see a string of Directional Changes. This isHIGHLY unusual and we have not see that type of formation in a very long-term. Expect wild swings and very choppy patterns into the end of September.
Reversals Are Scalable
This video demonstrates the different results obtained from trading the long-term major number vs. the short-term and all numbers. We will incorporate scalability eventually in Phase II for the trader service. These are just reversals and not merging cycles for entry or exit.
Berlin WEC November 28 & 29
Unquestionably, the overwhelming majority of “analysts” are predicting “a stock market crash for the fall of 2015”. Most predictions are centered on our target date, plus or minus a few days. We are in a period where the central banks are against the wall and are indeed defenseless against any market implosion.
But are we really looking at some mega collapse of all time? It seems gold is rallying on cue just after the WSJ called it a pet rock. The press touts it is rising because they think the Fed will not raise rates, but it seems that the hedge funds were too short on gold and the timing was just not right. True, some bailed out when our computer flipped to a long-position. Many professionals have learned they should not be on the opposite side of Socrates even when they may not be following our forecast generally.
You can bet on one thing: this is not going to be a plain vanilla outcome. There will be no mega super cycle collapse in equities inside the USA. We are dealing with a collapse in government and there is nobody alive who has gone through such an event, so it is hard to determine how people will be able to forecast the next four years from the perspective of opinion. This takes models going back more than 300 years.
We strongly urge those who would like to attend the World Economic Conference to consider Berlin. The waiting list now for Princeton is now over 100 people. Americans will not have to pay the VAT tax, which will only apply to Europeans, and even then most businesses get that back as well. We will make an announcement on the blog once we have more information regarding VAT tax repayment. In Berlin, we are able to increase the size of the venue where that is not possible in Princeton. For more information on the conference, feel free to contact us at PEIconferences@PrincetonEconomicsIntl.com.
Socrates & Trading
QUESTION:
Hi Mr. Armstrong,
What it exactly means when Socrates says : ” on the Weekly level we are currently with three short positions” OR ” we are long one position “.
Why ” ONE ” , ” TWO ” etc. positions whether long or short. What are their significance?
I will very much appreciate if you post a blog explaining these.
Thank you.
RU
ANSWER: The trading model in this context is set to speculation and will trade on every level of the Reversals, which have four levels in total. It takes one position per buy or sell on the close of that session. In the speculative mode, it will continue to add positions with each reversal until one is elected in the opposite direction. The trader level of our service will have the hypothetical track record back to inception of whatever instrument.
We will eventually set this to the desired trading level of activity so users can tailor it to their desired trading activity profile. Effectively, when set to all modes it will trade on each and every reversal, or you can set it to the least active. Each level will produce a different result.
Markets in Review
The markets are generally staging quite nicely for the ECM turning point. What generally rises into the turning point turns back down, and that which declines finds a bottom and rises. We have been stating that as long as the May high held, then we should decline in the U.S. share markets. A weekly closing below 2045 in the cash S&P500 should send the market down to retest the 1989–1988 level.
As far as Gold is concerned, the Weekly Bullish stands at 1188. That is still well above the market with the major resistance starting at 1205–1210 followed by 1225–1230.
The euro has been rallying nicely as well. Here we do not have a Weekly Bullish until we reach 114.50, while the major resistance continues to stand at 125.7–129.0.
So there is nothing to write home about to say there is a major change in trend. Everything is jockeying for position. We need the scare to send cash rushing into the short-end for the flight to quality to complete the bubble in government. Once that is complete, the future starts to shape up rather nicely.
What began in Shanghai has become the contagion. It is cyclical on a global scale and we are indeed all connected. It takes a computer to figure all this out.
A Registered Democrat’s Last Wish – “Please Do Not Vote For Hillary”
A New Jersey woman who was a registered Democrat wrote her own obituary where she asked her family and friends, “In lieu of flowers, please do not vote for Hillary Clinton.” Elaine Fydrych’s obituary has exposed more than political corruption. It has exposed moral corruption among the press who think freedom of the press means the freedom to censor the truth to suit their own agenda (see also CBS). The Philadelphia Inquire omitted that line about Hillary from her death notice. They had no explanation as to why it was omitted. The family has contacted the ACLU.
This shows just how anti-freedom the press really is. It seems to be news only when it supports their view.
PS Elaine – You did go out with a PUNCH.
The If-Then-Else Analysis
COMMENT: Marty, I want to thank you for showing me how real analysis actually works. I think so many people have been use to the typical buy and hold and its going to the moon forecasts that they do not understand how you even function. I am writing because I think many may misinterpret how you analyze markets. Like your gold forecast of Socrates. I can see that time and price are separate and your turning points can be a high or low. The forecast is a turning point and the interpretation is the trend and price leading into that turning point.
I showed a friend what Socrates wrote on gold and he didn’t get it. He was so use to the typical nonsense that he thought you will always be right because you address both sides. I explained to him it was clear. To continue to move higher gold had to exceed the previous week’s high and a failure means that target inverts and can present a low. Many just do not understand price and time are separate. I can see the difference in how you forecast but some who are use to the gold promoters may not.
Not sure if this helps, but I know you always listen to all sides.
Keep up the great work. We are all not that dense.
J
REPLY: Yes, you are probably correct. It is hard to keep that in mind when I am used to professionals rather than the general public. A REAL analyst must ALWAYS define where he is right and where he is wrong. The market is infallible, never the analyst. We are along for the ride. This is indeed about trying to listen to what the market is telling you for it is never wrong.
Secondly, it may be exactly opposite of what people believe, but it is far easier to forecast years out than tomorrow. The reason is rather simple. If gold rallies to 1150, 1185, or 1225 and then peaks on the turning point, it is irrelevant. A high is a high regardless of how high unless it starts to exceed Reversals on the monthly level where trend changes. This is what I refer to as NOISE. If we get a high or low in the short-term it does not change the long-term. So people get all flustered with a rally but to me its no big deal until it proves to be something on the monthly level. Everything else is just noise.
In trading as in analysis, just NEVER enter a forecast or a trade without defining where you are right and where you are wrong. So saying gold will rally but it must exceed the previous week’s high is defining where you are right. It is not trying to pretend you are never wrong. It is the professional way of doing things. There is no guessing. It is the IF-THEN-ELSEapproach and professionals will not accept anything less.
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