=== Prediction ===
Bull-Market Top @ 208.88 on 2014-12-08
Bear-Market Bottom @ 106.50 on 2023-02-01
Go Short @ 208.88, Stop Loss @ 227.43, Profit Target @ 106.50 in 8 years.
=== Description ===
I hope you've made lots of money in the market that has been raging since March 2009. Anyone who has been using a trend-following "buy-the-dips" trading strategy is now rich, and everyone (even my Dad!) is talking about how great the stock market is. Well, I have some bad news: this party is about to end. As of today, the SPY will begin a market that will last until February 2023, and its price will drop 61.8% to 106.50.
Here is a summary of my thought process (TradingView does not allow me to enter very long descriptions, so I can't go into too much detail. There's a link to my full description at the bottom):
#1 - Perfect Sebelliott "End-of-C" Wave counts on *every* time frame.
#2 - When the market starts to go down, people will worry that the Fed will not be able to maintain its hawkish stance. This causes a positive-feedback selling cycle.
#3 - The Dollar needs to pull back from its recent rally, and since it is currently correlated with the stock market, it will pull the market down too.
#4 - Upcoming bounce in oil will reduce company profits and push stock market down.
#5 - Everyone is Bullish: When my Dad, Wife, and Drinking Buddies all start talking to me about the stock market, and how it keeps going up, up, up... then I know we're getting close a top. When my Dad wants to invest his entire retirement account into GoPro ( GPRO ), I know we're there. :)
Here is a link to my full, detailed description: http://likebike.com/trading/20141208_8_year_bear_market_starts_today.html
The market might be entering a bubble state IMO, but it's not anywhere close to popping yet. There are plenty of large cap stocks, whose valuations actually look cheap (AAPL, GOOGL), and the US economy is growing at the fastest rate in a decade.
As for valuations - this is true. We just had one of the best earnings quarters in as long as I can remember. On the other hand, the global economy isn't looking all that hot and these large corporations' profits depend very much on that. Using valuations to predict market tops has a pretty dubious history, as you probably know. This isn't my prediction, but I'm interested to see how the convergence of waves portrayed end up playing out over time.
So while I find your "call for a top" very interesting, I think you should call only for a possible interim top, but not yet for a trend recersal. Sorry, but I am simply very sceptic about these kind of long term projections. I am also sepctic when big banks put a 2015 year end bullish tgt for SP500.
I hope you will be right.