How have we done on our stock market predictions in 2009? The proof of the pudding is in the eating!
If you browse around this blog you will find we accurately predicted the next move in price and time ahead of the crowd sometimes days, weeks and months before it actually happened.
On February 22nd 2009 we wrote: ” I expect that around March 10-12th +/- 4 days we will have set a temporary bottom. I than expect, looking at the longer term cycles, the market will retrace from the March bottom for several months and can go south again for another few months until June/July this year.“
On March 11th we concluded: ”Given the price movement of March 11th, there is a high probability we have reached the bottom of the medium term cycle we have been following for the stock market in past previews…”
Comment: the S&P 500 bottomed at March 6th 2009.
On May 3rd our findings were: “..the dominant cycle we are following closely in these blog postings of the last few months is still in play, and there is a 75% probability this cycle is likely to run it’s course until May 8th +/- 4 days. This intermediate high will probably confirm an Elliott wave 4 of some degree (or part of it), since the down-trend started in 2007. We do expect a further down-trend will set-in once this high has been confirmed. This will likely take us to much lower regions, and culminate in a bottom around July 7th 2009 +- 4 days.”
Comment: From May 8th 2009 onwards the S&P500 moved into a corrective pattern sideways to downward and bottomed around July 8th 2009. A great call for intermediate top and a bottom for the FTSE100 , but in some markets like the S&P 500 the cycle pattern did not behave as expected during May and June.
On July 16th we wrote: “The market dropped from that point to a 865 low on the pre-market S&P500 futures of July 8th. On the FTSE500 the market was already down on the dominant 4 month cycle, from early May, so it was to be expected that the market would reach a low around July 8th. As we haven’t seen so much movement to the downside in this cycle, one can conclude that the longer term cycles are still pointing upwards, and that we are now on a wave C as part of an ABC counter trend that started early March this year.. This will probably end the current cycle counter trend on a pricelevel that is between 980 and 1150 on the S&P500, with a possible timetarget of September 7th 2009 +- 4 days. The above 2009 mass pressure forecast charts also clearly indicates a bullish trend throughout the summer until early September 2009.”
Comment: The stock market continued on it’s projected course into early September so far as predicted on July 16th 2009. In the mean time we kept our subscribers informed on various potential scenario’s during August and early September.
On September 14th we concluded: “Given the current preferred Elliott wave count of wave C of 4, and taken into consideration the rate of change and slope of the current up trend, the end of wave C of 4 for the S&P 500 will most probably point into the end of September 2009 with a price target on the S&P 500 between 1070 and 1150” Comment: this scenario is still intact. Be aware that any close below the bottom of September 2nd on the S&P 500 will invalidate this scenario.
On October 5th and 12th 2009 we wrote: “It is getting clearer the market seem to have unfolded in a abc correction wave from the top in September, unfolding wave 4 of C 0f 4″…, “The changes are increasing we are now heading towards unfolding wave 5 of C of 4″ and “Assuming we are in the last wave 5 of C now we are looking ahead of us for the next probable top in the S&P500 to be set most likely in the last week of October, anywhere between 23-30 October 2009. Probable price target of 1121″.
Comment: During September and October we kept our head cool and continued to look for a logical correction point in the stock market, although we changed our opinion of the preferred Elliott wave count. Our forecast for the end of October top was within 4 days of the expected time target, although we did not reach the expected price target.
On October 27th we wrote: “On the short-term expect the market to head downwards into early to mid November 2009.” but on the longer term we noted: “The current Elliott wave scenario suggests we are on a wave 4 of A of a wave 2 counter trend. Fibonacci and Gann targets suggest the Wave A of 2 to be formed at the 62% Fibonacci retracement in price and time (on chart given: 15 January 2010 @1219-1240); at which point the S&P500 is in perfect harmony.”
On December 27th we wrote: “Clearly we bottomed early November as expected, and the trend resumed from there. Our dynamic market timing cycle model forecasted the consolidation period until the middle of December excellent, and the break out of this range was right on the expected time and in the expected direction. Moreover we reached the since mid 2009 forecasted price target of 1120 on the S&P500.”
“The current Elliott wave scenario suggests we are on a wave 5 of A of a wave 2 counter trend on the S&P500 and many other indices around the world. Fibonacci and Gann targets suggest the Wave A of 2 to be formed at the 62% Fibonacci retracement in price and time; at which point the S&P500 is in perfect harmony. Our dynamic market timing cycle model is further suggesting the current trend will likely continue into early 2010, after which a correction of some degree is likely to set in. Be aware this only could be a minor correction.”
Conclusion
I leave the rest of the conclusions and comments for you on the review of our 2009 forecasts. However a picture says more than a 1000 words. So have a look at our MTC Annual Forecast for 2008, based upon DJIA market data up to december 31st 2008, and what actually happened thereafter.
The MTC Annual Forecast 2009 and what really happened
The forecast for 2009 was made on 5 dominant cycles based on Gann’s approach to an Annual forecast. As you can see this MTC Annual Forecast for 2009 was pretty close for what actually happened in 2009. If these cycles continue on their course in 2010 they could be predictive for 2010 as well.
Be aware there always anomalies in the stock market that could disrupt the forecast on the short or medium term, although the longer term forecasted trend may still stay intact. This was clearly happening from time to time in 2009 as well.
We need to accept, that although certain rules and guidelines were applies in a systematic way, preparing the analysis and projections, this can be wrong sometimes. We never have all the information in advance and we are all humans, so our thinking could be easily clouded sometimes due to emotions and other limitations. So, you always need to keep questioning yourself, and others, including us. Past performance is not indicative for future results.
We have disclosed our forecast to our free newsletter subscribers this year, a year in advance.
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Tags: AEX, Dow Jones Industrial Average, Elliott wave, Forecast, FTSE100, Market Timing, Nikkei 225, Performance, S&P 500, Stock Market, Technical analysis, Timing
