Here is the culmination of my last 4 months of technical analysis of the stock market. I looked at important growth stocks of the past and where they are today. From that analysis, I applied the lessons learned to todays market.
1) Growth stocks break out of the mean channel of wave 1 to finish wave 3 and 5. Average stocks stay in the mean channel.
2) The following correction will take them back to the project mean of wave 1, maybe even below. The more they break above the mean the more they drop during the correction.
3) Head and Shoulders pattern usually describes motive waves 4-5 and the following corrective ABC wave.
After a major correction several things can be learned
1) Some companies never really recover, assume they just had high prices because every company did (thing tech bubble)
2) Some companies recover but never become growth stocks again and grow but stay along a mean growth
3) Some companies are able to reinvent themselves and become growth stocks again (MICROSOFT)
I can't say I did everything correctly. I took my best shot at it and at the minimum gives a solid idea what could be to come for stocks in 2020 and beyond.
I broke this down in several idea posts.
Market Cycles - Waves and return to the mean - Part 1 GE
Market Cycles - Waves and return to the mean - Part 2 AT&T
Market Cycles - Waves and return to the mean - Part 3 IBM
Market Cycles - Waves and return to the mean - Part 4 MICROSOFT
Market Cycles - Waves and return to the mean - Part 5 GOOGLE
Market Cycles - Waves and return to the mean - Part 6 AMAZON
Market Cycles - Waves and return to the mean - Part 7 S&P 500
Market Cycles - Waves and return to the mean - Part 8 NASDAQ
Hope this helps and good luck.
1) Growth stocks break out of the mean channel of wave 1 to finish wave 3 and 5. Average stocks stay in the mean channel.
2) The following correction will take them back to the project mean of wave 1, maybe even below. The more they break above the mean the more they drop during the correction.
3) Head and Shoulders pattern usually describes motive waves 4-5 and the following corrective ABC wave.
After a major correction several things can be learned
1) Some companies never really recover, assume they just had high prices because every company did (thing tech bubble)
2) Some companies recover but never become growth stocks again and grow but stay along a mean growth
3) Some companies are able to reinvent themselves and become growth stocks again (MICROSOFT)
I can't say I did everything correctly. I took my best shot at it and at the minimum gives a solid idea what could be to come for stocks in 2020 and beyond.
I broke this down in several idea posts.
Market Cycles - Waves and return to the mean - Part 1 GE
Market Cycles - Waves and return to the mean - Part 2 AT&T
Market Cycles - Waves and return to the mean - Part 3 IBM
Market Cycles - Waves and return to the mean - Part 4 MICROSOFT
Market Cycles - Waves and return to the mean - Part 5 GOOGLE
Market Cycles - Waves and return to the mean - Part 6 AMAZON
Market Cycles - Waves and return to the mean - Part 7 S&P 500
Market Cycles - Waves and return to the mean - Part 8 NASDAQ
Hope this helps and good luck.
