The S&P500 still on track

In last October’s reviews we wrote : ” There is a larger support and resistance zone we expect the S&P500 is heading towards. This point in time is also 45 weeks or 225 trading days after the March 2009 bottom. In Gann terms this point in time is typically a hard angle that typically come in as a high. We expect the market to continue it’s uptrend towards this point in time. Our dynamic market timing cycle model following the longterm cycles from the past also supports the larger trend will continue to move upwards until the end of 2009. Earlier in October we mentioned the probable price target of 1121. On the short term we expect the dominant cycle to bottom early to mid November 2009.”

I have received many emails from readers between October and today when we would update our forecasts again. I do apologies to the readers, but actually there was no need to re-iterate what we already stated in the October’s reviews. I would have bored you all. 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.

So, what will happen now? Will the market turn at this end as every respectable market commentator is expecting already for months after months.? Will we become a fool by keep on posting a contrarian position?

For now we will update our charts posted in October 2009 for your convenience until early January 2010. We will however reveal our full 2010 forecasts for subscribers only in a week from now! More on this to come in the next few days. Keep watching your email box. If not already done  subscribe now at the link on the bottom of this post, so not the miss our full 2010 forecast.

The current S&P 500 market position

There are many possible scenario’s for the current market position. The S&P500 seems to form an impulsive pattern(5 wave) of some degree, but this still could also be a simple abc counter trend, of which the first part is an impulsive wave. We also still could be in a wave 3 of A of 2. With Elliott Wave you can never be sure until the wave pattern has definitely been formed; the stock patterns form a fractal that can easily subdivide for quite some time and prolong it;s course.  Time will tell. For now we stick  with our earlier posted abc counter trend pattern, for which we are now in wave 5 of A of 2.

In the above charts we explained where the stock market is heading to, with the S&P500 as an example. 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

As all indices are closely related this trend and patterns is found in most other indices around the world as well. They all form similar patters, whether this is the Dow Jones, the German DAX, the FTSE100 etc..

If you care to review the current market position on the FTSE100 yourself, you might notice that the UK major index is very close in price and time to the expected Fibonacci target of early to mid January. It would not be the first time that the FTSE100 leads the way.

Still heading towards old support

It seems hard we will reach the projected time and price target of mid january +- 5 trading days as projected in above chart; it is still a way to go. It is not impossible though. In the past there have been large price swings before in a very short time.

Stock Markets typically tests these old support line( as part of a larger Heads and Shoulders pattern) once broken, before continuing their earlier trend set in. So, we still expect the market to test this neckline first, before a trend change of some degree is likely to set in.

Moreover as mentioned last October’s preview this point in time is also 45 weeks or 225 trading days after the March 2009 bottom. In Gann terms this point in time is typically a hard angle that typically come in as a high. We expect the market to continue its trend towards this point in time.

Longer term cycles support a further up-trend

Our dynamic market timing cycle model following the longterm cycles from the past also still supports the larger trend will continue to move upwards until early 2010.

Note: Please be aware that the projected price is based on a hypothetical Mass Pressure forecast model, that the actual price will differ from the forecast given here, and possibly higher or lower. This mass pressure forecast chart is only to indicate the bullish and bearish trends , and should not be traded upon.

The dominant cycle approaching its crest

On the short-term we expect the dominant cycle to approach its crest early to mid January 2010 on the S&P500. The crest can form as early as January 8th or as late as the end of January +- 4 trading days, as cycles can deviate from their normal course.

Conclusion

Our conclusion remains boring but is still in tact since last October’s preview. 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.

From the dominant cycle perspective we also expect the market to form a crest early to mid January 2009. This scenario remains valid unless we close below the 1080 on the S&P 500.

The 2010 Forecast

We believe we are still further climbing up the fall of fear, but we still seem to be in a counter trend of some degree. The further we climb upwards the harder we could fall. In chinese astrology 2010 will be the year of the tiger. We expect the stock market too behave in a likewise manner. 

In our full 2010 forecasts we will reveal the likely path and pattern the stock market will take in 2010 a full year ahead and even beyond! We will make this forecast available to subscribers only!

Don’t miss this yearly forecast, that will reveal the likely path the stock market will take from various angles that support our vision for 2010.

More on this to come in the next few days. Keep watching your email box. If not already done  subscribe now at the link on the bottom of this post, so not the miss our full 2010 forecast.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

S&P500 Heading towards old support

In last week’s previews of 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″.

We were probably right about a top for now in the S&P500 at the end of October. However, from yesterdays analysis and due to the most likely market position we have changed our position on the current market position for the S&P500. We are still in a countertrend, but the evidence is on the current advance in price and time is suggesting we are in a countertrend of a different nature.

The current S&P 500 market position

The current market position in time on the S&P 500 does not support much longer our earlier opinion we were in a wave 4 of C, with a wave 5 of C still to come. We have simply moved too far beyond the typical time target for a minor wave 4 of C to keep this scenario our preferred scenario.

There are many possible scenario’s for the current market position. We either have reached the bottom of the bear market in March this year, with completing wace C (this seems to be too early in time; unless we are in an expanding ABCDE triangle) or we have just completed wave 1 of C and there is still more downside too come after the countertrend of wave 2 has been completed. Anyway, in either scenario we are in a counter trend position. The current market position of the S&P 500 best suggests we are in wave 2 of C.

Does the top of October in the S&P 500 suggests we have reached the end of Wave 2 already? In our opinion the mimimum time target to be reached is 50% of wave 1, but typically the time target for a wave 2 is between 62% and 162% of wave 1. This is a fairly wide range in time, but – as you can see in the chart – the 50% time target of wave 1 has not been reached yet. So, we are cautious not to draw a conclusion to soon.

The current count could suggests we are in a wave C of 2 already, but this could also be a wave 3 of A of 2, and then the wave A of 2 would typically be set at the 62% retracement in time. Clearly the recent October 2009 top could be of some significance as we have forming a 21-34-55 Fibonacci symmetrical triangle between the October 2008 Gap, the bottom in March 2009 and the top of October 2009(not drawn in the chart).

But the recent top did not coincide in time with a 50% retracement. So, we expect the current October top not to be of great significance but only to coincide with a minor wave 3 of A of 2.

Heading towards old support

There is a larger support and resistance zone we expect the S&P500 is heading towards.There is a heads and shoulders formation visible in the chart of the S&P 500 that was broken in September 2008 after which the downtrend was set in towards March 2009.

Stock Markets typically tests the support line once broken, before continuing their trend set in.However, the stock market has not yet tested the neck line of the Heads and shoulders formation yet. So, we would expect the market to test this neckline first, before a a trend change of some degree is likely to set in.

When you take a closer look at this neckline you will see this point in price coincides with both the 62% retracement of wave 1 both in price and time. This also coincides with the 1×1 Gann line, and well on the path of the current trend. This point in time is also 45 weeks or 225 trading days after the March 2009 bottom. In Gann terms this point in time is typically a hard angle that typically come in as a high. We expect the market to continue it’s uptrend towards this point in time.

Longer term cycles support further uptrend

Our dynamic market timing cycle model following the longterm cycles from the past also supports the larger trend will continue to move upwards until the end of 2009.

Note: Please be aware that the projected price is based on a hypothetical Mass Pressure forecast model, that the actual price will differ from the forecast given here, and possibly higher or lower. This mass pressure forecast chart is only to indicate the bullish and bearish trends , and should not be traded upon.

Shorter term considerations

On the short term we expect the dominant cycle to bottom early to mid November 2009.

Conclusion

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; at which point the S&P500 is in perfect harmony. Our dynamic market timing cycle model is further suggesting the current uptrend will likely continue into end of 2009 and early 2010, after which a correction is likely to set in.

On the short term expect the market to head downswards into early to mid November 2009. This scenario remains valid unless we close below the 1017 on the S&P 500.

We believe we are still further climbing up the fall of fear, and we still could reach price targets we have posted in our analysis back in September. Take care and stay tuned!

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© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Market Position S&P500 – week October 12th 2009

In last preview of October 5th 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″… and “The changes are increasing we are now heading towards unfolding wave 5 of C of 4″.

The current Elliott wave count on the S&P500 and the strong move upwards seem to confirm last week’s analysis.

From todays analysis and market position it could be concluded that we have formed a wave 5 of C of 4 today. See below chart.

This could be true but the only way to validate the above scenario is the next move should close below wave 2 of 5 (1045), and the next move downwards is of an impulsive wave structure(5 sub waves) which has not occurred yet.

Considering the time target of the last week of October we have posted in our previous analysis, it is also fair to assume that we are still in a wave 3 of C of 4, and we are now forming a wave 4. See below chart.

This latter scenario is now our preferred scenario unless we close below 1045 on the S&P500 and the next move downwards is of a clear 5 wave impulsive nature. We believe we are still further climbing up the fall of fear, and we could reach price targets we have posted in our analysis back in September. Take care and stay tuned!

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Market Position S&P 500 – Week October 7th 2009

In last preview of October 5th 2009 we wrote: “Evaluating how the market is unfolding we either have reached to top already in the end of September on the S&P500 or we are still in a wave 4 of C 0f 4.”

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. If the high of September 29th 2009 is broken this scenario is likely to be confirmed and it will become our preferred scenario as long as the low of October 2nd has not been violated to the downside. 

The changes are increasing we are now heading towards unfolding wave 5 of C of 4. From a Fibonacci point of view we would like to share todays analysis with you on the S&P500 supporting this scenario.

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.

There are many Fibonacci relationships, both Fibonacci and double Fibonacci from recent highs and lows since the top in October 2007 that points in this direction. Notice the symmetrical triangles on succesive (double) Fibonacci numbers: 21-34-55 (26-42-68) that are usually found at tops and bottoms of some degree

If this time target coincides with the 50% retracement from W3 from May 2008 – March 2009 this adds to the probability the high will be set around this time. Allow for a week deviation from either side of October 30th 2009, as highs could fall on Fridays or Mondays as well (so on weekly bar could differ 1 week from target date).

Be aware! This scenario is valid unless the low of wave 4 of C (week Oct 2nd 2009) at 1019 is not violated; else we have  probably set the high in week Sept 25th 2009  already and we need to reconsider the most likely market position.

We see quite some volatility ahead of us, with probably quite some mood swings from bulls and bears alike. We are further climbing up the fall of fear. Take care and stay tuned!

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Preview of week commencing October 5th 2009

In last week article “fifth wave failure” we wrote: ” we shared our thoughts on the likelihood for a market turn to occur  in general for most Indices anywhere between 28th/29th September 2009 to 6 October 2009  +- 1 trading week. We have reached the middle of this range and it is now likely the Stock Market has reached the top for now – unless we are still in a more complex wave 4 of 4 of C …”

In any case the fifth wave scenario we wrote about was most probably incorrect. Evaluating how the market is unfolding we either have reached to top already in the end of September on the S&P500 or we are still in a wave 4 of C 0f 4. We will explain in more detail in this article why we are still cautious.

The dominant cycles are clearly indicating a top has likely been reached.

From an Elliott wave perspective this looks something like this:

In the above scenario we assume we already have finalised wave C of 4.

But cycles can extend as well, so did we really get into the top already?

Analyzing wave c of 4 in more detail one could conclude we are still in a wave 4 of C of 4. On the weekly chart it is not that clear that wave C of 4, starting early July consists of 5 sub waves; in fact the chart below clearly indicates we are still in a wave 4.  On the daily chart it is even more unclear.

In order to be able to call in a top, the next wave after the top  should always be an impulsive wave (consisting of 5 sub waves).

Assuming we are unfolding an impulsive wave, the preferred scenario looks like this and could now well be unfolding:

However there is an alternate scenario which is still possible to unfold as well.

Alternate scenario

Assuming we are still unfolding the top of the cycle and implying we are still in a wave 4 of C of 4, we are now unfolding the last part of wave 4, which is a three wave corrective wave:

In this latter scenario we probably have something like up to 20 points downwards to go. Note: if we hold above the 980 on the S&P500 this could well be a valid scenario.

Conclusion

We are still assuming the top in the S&P500 has been set in at the end of September.

Given the possible alternate scenario of a wave 4 of C of 4 is still unfolding, and we do not break the 980 on the S&P500, we would be carefull out there ignoring this scenario too soon.  Although our preferred scenario is the top has already been set, we are still open for the scenario we could also be unfolding a wave 4 of C of 4.

We are closely watching whether or not an impulsive wave will unfold after the top in September, this will give us the ultimate confirmation the top has been set.  If this is not an impulsive wave(5 sub waves) but a corrective wave(3 sub waves), we have still a last fifth wave to go to the top. This could still well could fit in the dominant cycles we are following. Take care and stay tuned!

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© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Fifth wave failure

In our last articles “The secret of Market Timing” and “Running out of time” we shared our thoughts on the likelihood for a market turn to occur  in general for most Indices anywhere between 28th/29th September 2009 to 6 October 2009  +- 1 trading week.

We have reached the middle of this range and it is now likely the Stock Market has reached the top for now – unless we are still in a more complex wave 4 of 4 of C – by breaking the low of September 28th the fifth wave of wave 4 of C has likely ended in most indices today or early tomorrow for others.

The fifth wave as shown on a 15 min chart for the S&P500 below, clearly suggest to have formed a contracting or ending diagonal. This primarily occurs when the preceding wave has gone “too far, too fast” in the words of Elliott. 

S&P 500 (15 min; wave 5 of C of 4)

In all cases these contracting/ending diagonals are found at the termination points of larger patterns, indicating exhaustion of the larger pattern. So, in my opinion wave 5 of c of 4 on the S&P500 ended yesterday. There was not enough steam left for the indices to evolve into an impulsive wave; hence a fifth wave failure or ending/contracting dialog was the result.

On the daily chart of the FTSE 100 and many other indices, the wave C of 4 also clearly shows to have likely ended yesterday because of this fifth wave failure (not breaking wave 3).  

FTSE 100 (daily; wave C of 4))

Note: The above scenario’s are invalid when the top of September will be broken.

For the FTSE 100, and many other indices, this recently formed crest is just approx 144 Fibonacci days away from the lowest low in March 2009. The end of a 29 week cycle.

There are many other indicators the top has likjely been set. All minimum price and time targets for a wave 4 have been reached earlier. Clearly there is now also a double top formed in the FTSE 100, which will work as future resistance.  The stochastics has been overbought for some time as well (and now declining), and as gravity is increasing since the end of September this will help in pulling the indices further downwards.

Investors, like some of you, are getting nervous . In the past few days I haven’t seen so much traffic to my website since this web blog came into existence.

What is the next projection?

There is still a question in our minds popping up whether this will be the top for now, or only wave A of 4 of C. Yes, there is a possibility the wave 4 could linger on some time. Meaning we could now be embarking a wave b of 4 of C instead of on a wave 5 of C.  We will be looking for clear evidence of either a abc counter trend in the next move (meaning wave 4 will not be over for some time) or an impulsive 5-wave move implying indicating the wave 5 of C has started. In any scenario tehre will be a correction of this uptrend for some time.

For the medium term we are now looking downwards, unless the top of September will be broken. Stay tuned.

We will be posting more stock market analysis for our selective group of subscribers through our postings on markettimingcycles.com. If you want to be kept up-to-date on our cycle research and stock market commentaries please subscribe to our newsletter below now.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

The secret of Market Timing

In our article of August 28th 2009 called “Investors are still climbing up the wall of fear”  we published our expectations of where the indices would end their current advance around mid September 2009. In the same article we also mentioned: “Be aware! The current highs in the market are already within the minimum acceptable time and price range for an Elliott Wave c of 4 to be finalised. On the alternative scenario there is still some room for investors in some indices to further drive the index towards the upper part of the channel, but some other indices are already at that point but could consolidate in the mean time, even into early October at the latest.”

We are unfolding that last scenario right now. The secret of Market Timing is to attend to all details and to get the last pieces of the puzzle to fall into place. One can easily overlook details. If you look from a distance at a forest, one can not see the trees clearly. If you only come into close range, you see more and you can confidently discriminate the different trees from the forest. The same applies to the Stock Market.

So, this is why we continuously research the market position from all angles, and only when all the puzzles fall into places and we get confirmation from various sides that do not contradict; we come to a final conclusion about the position of the stock market. We simply adjust, refine our analysis, once more information comes to the table. If you have read all our previous articles after August, you see what we mean. We allow the market to unfold itself, and base our conclusions on that evidence.

In this weeks preview we have already analysed that we assumed a final leg into the crest of the current cycle was still pending to come. Simply all of the evidence still did not match up. Todays market volatility to the upside, suggests we have now possibly embarked on a final leg, in competing wave C of 4 of some degree.  We could still be heading to a crest at September 28th/29th +- 1 trading week. But the final leg, could well be the beginning of October as well, as I mentioned on August 28th already. We will use the FTSE 100 market position as an example.

What is the FTSE 100 market position?

When evaluating the timing and analysis of the stock market we always check the market position of  the FTSE 100. The FTSE 100 has a higher correlation with any global stock market indices than the S&P500.

If you are aware of Gann’s work than you probably have noticed that the FTSE 100 turned its’ course on bang on the 60th and 90th days(degrees) of trading, since the bottom in March. See below chart.

 

Yes, from above chart you will see we did not use the lowest low date, but instead the lowest close date (which is 3 days earlier).  You should always look at both options. A three days earlier or later start of your counting could lead to 1 week difference in final timing.

You also can conclude that there are some important Fibonacci relationships in price and time unfolding. The first advance in price up to wave A was a 987 (Fibonacci) point advance since the lowest close on March 3rd 2009.  Wave C could still well be double that amount (1974 points) from that point, it is bang on the Andrews fork upper-line and a GANN 1X1 angle.  

Drawing the Andrews fork, a GANN 1X1 angle, as well a displaying the Fibonacci rations between the ABC wave now unfloding they  all seem to come together at October 6th, at a price level around 5486,09, which is 1974 (double 987 Fibonacci) points since the lowest close on March 3rd.

From an Elliott wave perspective wave 5 of C could well end anywhere between 5220,03 and 5486,09 of which the latter is a the double Fibonacci points retracement from the lows in March as well as a Fibonacci 4,236 wave extension for completing wave 3-5 from wave 2. I am sure it will not be right on this price level, but the odds are high it could come very close. Keep a close watch on the above price range.

Anyway, the price target will likely coincide with a time target of October 6th +- 1 trading week. Be aware this scenario is still a projection and time is more important than price. When time is up the market will turn definitely.

You can apply a same approach towards the DAX, S&P 500, Nikkei 225, the Dutch AEX and many other indexes, although some of them have different but similar solutions. You will most likely find a same target around the dates mentioned for the FTSE 100 in this article +- 1 trading week.

Conclusion

The secret of Market Timing is to attend to all details and to get the last pieces of the puzzle to fall into  place. There are really no secrets, all information and evidence is right in front of us. If we only want to know and see. See in this article on the FTSE 100, how a likely Elliott wave 5 of C will probable coincide with the upper part of an Andrews Fork, a GANN 1×1 angle, possibly bang on a 1974 Fibonacci point(double 987 Fib) advance since the lowest close on March 3rd 2009, and including a GANN 150 trading days/degrees away from that same important bottom.

Is it a coincidence or does all evidence come together at this point? We don’t know 100% for sure yet. Anomalies, unexpected shocks in the Stock Market can happen at any time but the probabilities do favor this scenario. It is still a projection but for now this is our bias for the moment we like to work from. 

Including our earlier analysis in the article “Running out of time” in our thoughts, the time span for a market turn now is anywhere between 28th/29th September 2009 – 6 October 2009 for the FTSE 100(and many other indexes) +- 1 trading week. Each market might deviate somewhat from the FTSE 100.  We will evaluate at a later point in time what will become of this projection.

If time permits I will add the analysis for the other indices we have discussed earlier in the article on “Investors are climbing up the wall of fear” in the coming days. Take care and stay tuned.

We will be posting more stock market analysis for our selective group of subscribers through our postings on markettimingcycles.com. If you want to be kept up-to-date on our cycle research and stock market commentaries please subscribe to our newsletter below now.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Running out of time…

We are running out of time. Time is more important than price. When a cycle top or bottom is due the Stock Market will turn regardless if price targets have been reached.

Now we are approaching the top of a crest to be expected to unfold around mid to end of September 2009. I have a bias for September 28/29th as at that point gravity is at the lowest point in the year and Mercury turns direct. This is why the stock market has been ascending so long, but I guess the influence of gravity could become less and less as we approach September 28th.

How does that work? When gravity is low, there is less pressure on the earth and on the minds of us all, so we feel less depressed and more optimistic, so we take more risks on the stock market.

Gravity is at the highest point around February and March of each year as well. If you get the message, you will see that gravity around that time causes the stock market to reach often their lowest point in the year. Hence, the gravity, due to the Sun, Moon pulling at us, causes a natural seasonality. This causes natural cycles to occur that are very powerful. This even has effects on nature around us.

At September 29th, 2009 Mercury, now in retrograde mode (as if moving away from earth). goes direct again(moving towards earth). Mercury effects commerce and the communications, negotiations around it thus preventing clear messages coming through to investors; hence more fluctuations on the stock market as we perceive to receive mixed messages. During a retrograde mode the stock markets fluctuates more often, and going direct again the stock markets usually changes direction as well. Within a span of 8 days there is a great probability  of a greater cycle crest to unfold, for which we have been waiting for. 

So, this all means we are close to the top of the Elliott wave C of 4 of some degree. The top could already have been set in, but there are still scenario’s to consider a last wave could be possible to finish of the corrective pattern or counter trend.

The counter trend usually unfolds in a simple zigzag and abc format. See below (still) preferred scenario.

Reviewing this scenario it seems that this scenario in time does not really fit the price and time targets to be expected end of September. We need far more time to unfold wave C of 4 in this scenario.

There is however an alternative scenario to consider: a double zigzag. This better fits with the observation that the market is struggling. Resistance from the larger trend is preventing to form a clear impulsive wave. Hence more corrective sub waves are formed.  Look at the alternative scenario below.

This alternative scenario, seriously should be taken into consideration. The pattern still could unfold in a 5 wave completing wave C of Y and completing the double zigzag at the expected time target.

From a cycle point of view, we are approaching the crest of some dominant cycles. Have a look at below analysis on the dominant medium term cycles.

The composite trend (shown in red), composed out of 4 dominant medium term cycles, is already turning suggesting the top has been set in.

However this was also the case in May/June this year, while the stock market kept on going ascending before turning down and form a sideways pattern staring in May.

 

If you review the current mode the cycles are in, one of the cycles could still cause the stock market to form a last wave. This could be a higher high, but due to the other cycles it also could cause the stock market to form a double top at the recent high or just below it.

 

The longer term dominant cycle is still due at the end of September +- 1 trading week. There is a high probability this cycle will start a new cycle wave downwards any time from now. This cycle forms a Fibonacci relationship of 144 days between highs and lows in the market after which the market turns. It is usually spot on within 1 week. The Bartels test shows a very significant correlation of this cycle to repeat in the future. (I will post more on this during the weekend). Have a look at below analysis. 

 

 

This dominant cycle tells me, we are right in the middle of the time span this cycle could turn direction. If our analysis is right we are clearly running out of time towards ds the time target of September 28th/29th 2009 +- 1 trading week.

 

Combining the Elliott wave scenario’s with the cycle scenario’s mentioned in this article there is a high probability the market will turn anytime from now, if not already done. There is no guarantee, as anomalies can happen the Stock market distorting the cycles for some time.

 

Don’t jump after it, if the market already turned, it usually will bounce back first on a second wave, before really turning south. You do not want to be caught in that retracement. Take care!

We will be posting more stock market analysis for our selective group of subscribers through our postings on markettimingcycles.com. If you want to be kept up-to-date on our cycle research and stock market commentaries please subscribe to our newsletter below now.

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© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

An overview of our Stock Market projections in 2009

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.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2010 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.

Preview of week commencing September 21st 2009

In last weeks preview we wrote (amongst other things): ”..We are now in a sub wave 3 of C of 4 that is about to end; so, if this scenario is correct, we expect some minor counter trend (wave 4 of C of 4) in the coming week(s) to come, after which wave 5 will complete the wave C of 4.”

Forwarned is forearmed. The Stock Market  is now further climbing up this fall of fear. The Stock Market is taking it’s time to complete  a wave C of 4 of some degree we assume for now. In earlier posts we published a time target between mid and end of September 2009. We have reached the minimum target in price and time for some time, and the trend is still in tact.The market is overbought, so be prepared the market can turn at any point in time. A top could already have set in.

 

We are now closing in to the 50% price retracement level (S&P500:1122) of wave 1-3 (October 2007-March 2009) at a probable time target of September 29th 2009. This target is at the top of the channel, at the crest of a dominant cycle (see below chart) ,as well as 144 Fibonacci trading days since the bottom of March 6 2009. This target applies to many of the major indices like the Dow Jones Industrial Average, FTSE100, German Dax, Nikkei225, the Dutch AEX etc. Some markets already reached at their preferred price targets!

 

Be aware. The Stock Market is likely to be drawn as a magnet to this energy point in time and price, mentioned in this article, although anomalies can happen. The party is likely over if we close below 1015 on the S&P500. Allow for some deviation at the probable top of  +- 1 trading week. Take care!

We will be posting more stock market analysis for our selective group of subscribers through our postings on markettimingcycles.com. If you want to be kept up-to-date on our cycle research and stock market commentaries please subscribe to our newsletter below now.

Join a group of select individuals and subscribe to our newsletter here and we will put you on our mailing-list. We respect your privacy. We don’t sell, rent or share your name or email address.

© 2001-2009 MarketTimingCycles.com. This article is not part of a paid subscription service. It is a free service and is aimed to educate and demonstrate the successful application of cycle analysis. At no time will specific security recommendations or advice be given. Whilst the information herein is expressed in good faith, it is not guaranteed. A trading system that never makes mistakes does not exist. Error and uncertainty are part of any effort to assess future probabilities. Trade at your own risk. Read our full disclaimer and Terms of Use.