This is a purely technical guesstimate for how the market will advance given the pschological, sentiment, monetary, economic environment as I analyze it. The waves are just guesses based on market reactions to visible support and resistance levels. I "saved" this yesterday with the DIA at 128 and now with the market back up to 129.70, it appears that the support level down at 124-120 appears solid and it shouldn't be tested for at least another 10 weeks.
The important element of this chart is the amount of time that has been spent prior to the breakout rally. The more time and accumulation, the bigger and longer lasting the rally. All the while, even though VIX has been low indicating complacency, equity mutual fund outflows have been strong which continues to show fear. Now that we are one day into earnings reporting season and the trend is positive.
Cheers. Technical Tim April 12, 2012 3:59PM EST
Comments
timwest
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Ok. Now it is really time to make a new prediction. This recent rally has almost caught up to the projection from 8 months ago. The current rally is almost reminiscent of the 1987 launch in January, leading to a 22% gain by August of 1987. This rally has so many pluses and minus, that I would view choppy action going as the most likely outcome. Steady gains, followed by sharp reactions to shake out the weak longs. I view the downside risk as 10% and the upside potential at 5% from here (Feb 1st, 2013). Let me design another forecast... Cheers. Tim 11:49AM EST, Feb 1, 2013
timwest
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It's time to make a new projection - this one has expired. Only 7 "likes" out of 794 views?
timwest
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Followed.
alexledger334
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Followed.
timwest
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Still going along track from 5 months ago...
timwest
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This forecast is still grinding it out... trying to catch up to the more bullish forecast I laid out five months ago. Probably when we get the election behind us, then with some certainty about Gov't policy to deal with our fundamental deficit, together with spurring and incentivizing growth, there could be a bit more optimism by the time January rolls around.
Mitch_Financial
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Agreed.
timwest
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The market is still treading along the projected path from this forecast nearly 4 months ago.
timwest
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This forecast is still on track as of July 18th. The overall nervousness is palpable everywhere I go. Here are a list of the worries that are brought up in conversations: the elections, tax rates, the fiscal "CLIFF" from forced budgetary Gov't spending cutbacks, weakening earnings growth, poor economic reports (below estimates), powerlessness of the Fed, weak employment picture, Eurozone troubles, pundits forecasts for another bad bear market. Couple these comments with short term traders being "short S&P futures" and you have a situation where you have to ask yourself, who is left to sell? You do need sellers to drive the price at the margin down. Without sellers, the market can just sit and bobble around at this price for awhile until tensions are removed and those buyers (who are sitting in cash) move back into equities over time. This is the reason the market just muddles along. The biggest support for the market comes from the fact that oil prices dropped from 110 down to 80. Falling oil prices are a good harbinger of rising equity prices in the 3-9 months that follow a 20% drop. If someone wants to do that data crunching, it would be interesting to see the exact numbers. Cheers. Technical Tim Wed, 11:38AM EST July 18, 2012