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Multi year major top in equities in May 2013?

Multi year major top in equities in May 2013?

Postby tomsky » Wed May 29, 2013 9:23 am

My opinion is that a major top occured on May 22nd. The retest, if it isn't over, will fail somewhere in the next 2-3 weeks.
Let's see why:

1. Based on jupiter saturn uranus cycle a top should be around this period (see some of my older posts on the forum, here is explained throughly and here )

2. INDU has formed a big megaphone top since 2000:
20130529 djia m arit.png
DJIA monthly arithmetic scale target 6k

Considering this expanding triangle the first target should be at the lower trendline and, combining with point 1, we should see a bottom around december 2015 or january 2016 at around 6000 points for DJIA.
I hope this megaphone top won't take the following course or we could be in real trouble:
9024f4d0.jpg
Expanding top
9024f4d0.jpg (11.99 KiB) Viewed 10881 times

source: http://www.trending123.com/patterns/rev ... angle.html
Traget could be around 600 points in this case :o and should not go below 386, the top from 1929.
20130522 djia.png
Expanding top breakdown?

In these links you can find explanations and how to trade such a formation:
http://www.investopedia.com/terms/b/bro ... mation.asp
http://www.thepatternsite.com/bt.html

3.Elliot waves counting: i've seen some long term counts and most of them are presuming we are near a top. Most bearish is Prechter's count, the 1929 top is counted as 3 and the following tumble as 4, this presumes the expanding top is 5 and all hell could break loose, but don't think this is the case.

Let's see some long term counts:
From elliottwavepredictions.com:
DJIA-quarterly-2-21-13.png
elliotwavepredictions

Here is a long post from the same site explaining Prechter's count and Dow with a different wave count.

From Safehaven:
26273_a.png
safeheaven count

http://www.safehaven.com/article/26273/ ... ve-pattern

Now the last chart explaining why i don't bet on a breakdown of the megaphone:
20130529 djia q log.png
Dow quarterly logaritmic

The 61.8 fibo retracement from the 1932 bottom till this top is around 6000 points which coincides with the lower trendline of the expanding top around january 2016 (form 1 above).

I know it is a lot to digest but i'm curious if somebody else have the same or a different perspective on this.
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Re: Multi year major top in equities in May 2013?

Postby Tutti » Wed May 29, 2013 1:24 pm

I guess I'm an optimist and at some point will be taking the other side of the trade as you.

I'm hoping we play out a scenario closer to 1980 or 1982, where after we break through a decade + long secular bear market we enter into a new secular bull market. I've also done some work on secular bulls and bears and have some data to support my beliefs.

I expect a correction thats >25% but certainly nothing like we saw in 2008. 50% corrections, let alone full retracements of an entire move are very rare things. At the tale end of a secular bear where we have already made a lower low (2003 and 2009) I certainly would not expect such a catastrophic event and I don't believe if taken in proper context that there is any precedent for this.

Then again, what do I know & as Peter L Brandt so eloquently says when it comes to trading, "strong opinions, weakly held."
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Re: Multi year major top in equities in May 2013?

Postby tomsky » Thu May 30, 2013 6:31 am

The reactions took place in the daily trading forum so i'm posting them here for further reference:


uempel wrote:
Cobra wrote:tomsky had a good post here on our investors lounge. Don't forget we now have Investors Lounge forum viewtopic.php?f=11&t=937


Cobra, I love Tomsky, but let's note that (unless a meteorite strikes, the Chinese overthrow their governement, a virus kills millions, global warming goes parabolic) his scenario is highly unlikely. Note too that he shows his scenario with INDU.

As I said: I like the guy, but at the moment momentum suggests that the market is going to continue upwards:

monthmom.png
uempel's momentum


TraderGirl wrote:
uempel wrote:
Cobra wrote:tomsky had a good post here on our investors lounge. Don't forget we now have Investors Lounge forum viewtopic.php?f=11&t=937


Cobra, I love Tomsky, but let's note that (unless a meteorite strikes, the Chinese overthrow their governement, a virus kills millions, global warming goes parabolic) his scenario is highly unlikely. Note too that he shows his scenario with INDU.

As I said: I like the guy, but at the moment momentum suggests that the market is going to continue upwards:

The attachment monthmom.png is no longer available


I agree that scenario is highly unlikely, the market is already de-leveraging (other than margin debt), so a market meltdown at that level seems too good to be true :D

But, it is very likely and possible for the markets to have another bear market...if history repeats itself, it's possible to see a 50-60% retrace of the move from 2009 to the top at ??? whenever that happens. There are a lot of factors still in play that could send this market down, Europe, China slowing, Canadian real estate market, Japan - and their ridiculous amount of money printing...in addition to the astro's that are in play...



uempel wrote:TraderLady, a 23.65% correction puts the market at 1436, a 38.2% correction targets 1288. But I can hardly imagine a correction down to the 1288 level :shock:


My view
TraderGirl wrote:
uempel wrote:
Cobra wrote:tomsky had a good post here on our investors lounge. Don't forget we now have Investors Lounge forum viewtopic.php?f=11&t=937


Cobra, I love Tomsky, but let's note that (unless a meteorite strikes, the Chinese overthrow their governement, a virus kills millions, global warming goes parabolic) his scenario is highly unlikely. Note too that he shows his scenario with INDU.

As I said: I like the guy, but at the moment momentum suggests that the market is going to continue upwards:

The attachment monthmom.png is no longer available


I agree that scenario is highly unlikely, the market is already de-leveraging (other than margin debt), so a market meltdown at that level seems too good to be true :D

But, it is very likely and possible for the markets to have another bear market...if history repeats itself, it's possible to see a 50-60% retrace of the move from 2009 to the top at ??? whenever that happens. There are a lot of factors still in play that could send this market down, Europe, China slowing, Canadian real estate market, Japan - and their ridiculous amount of money printing...in addition to the astro's that are in play...



TraderGirl wrote:
uempel wrote:TraderLady, a 23.65% correction puts the market at 1436, a 38.2% correction targets 1288. But I can hardly imagine a correction down to the 1288 level :shock:


My view
TraderGirl wrote:
uempel wrote:
Cobra wrote:tomsky had a good post here on our investors lounge. Don't forget we now have Investors Lounge forum viewtopic.php?f=11&t=937


Cobra, I love Tomsky, but let's note that (unless a meteorite strikes, the Chinese overthrow their governement, a virus kills millions, global warming goes parabolic) his scenario is highly unlikely. Note too that he shows his scenario with INDU.

As I said: I like the guy, but at the moment momentum suggests that the market is going to continue upwards:

The attachment monthmom.png is no longer available


I agree that scenario is highly unlikely, the market is already de-leveraging (other than margin debt), so a market meltdown at that level seems too good to be true :D

But, it is very likely and possible for the markets to have another bear market...if history repeats itself, it's possible to see a 50-60% retrace of the move from 2009 to the top at ??? whenever that happens. There are a lot of factors still in play that could send this market down, Europe, China slowing, Canadian real estate market, Japan - and their ridiculous amount of money printing...in addition to the astro's that are in play...


I'm not talking about a correction taking us down that far right now....you have my correlation chart so you know that I am still bullish medium to longer term...there could be a time in the next 6-10 months where we could see the market in a "bear market", not just a correction...and yes 1,100 to 1,200 area is possible...



uempel wrote:Well TraderLady, I guess I'm much more bullish than you. Even long term I don't see that kind of weakness (unless something really ugly happens...)



TraderGirl wrote:
uempel wrote:Well TraderLady, I guess I'm much more bullish than you. Even long term I don't see that kind of weakness (unless something really ugly happens...)


Nobody "expects" a bear market..they happen when it is unexpected....when investors are super long and unprepared... :D :D


Cobra wrote:
uempel wrote:He would generate tons of hate posts. I guess he's the most hated guy in the retail world :D


Cobra wrote:
uempel wrote:Why don't you invite Prechter as a contributor :mrgreen:



He'd think I'm nobody therefore ignoring me. Not sure if I have more subscribers than he has though (not kidding).


Not sure if he's still bearish or not. I think this bull market hits him a lot if he still keeps saying top.


TraderGirl wrote:This has been posted before but Investor's are leveraged as they were in 2000 and in 2007....
Screen Shot 2013-05-29 at 10.46.41 AM.png
Tradergirl's leverage graph



Heck wrote:
Cobra wrote:
uempel wrote:He would generate tons of hate posts. I guess he's the most hated guy in the retail world :D


Cobra wrote:
uempel wrote:Why don't you invite Prechter as a contributor :mrgreen:



He'd think I'm nobody therefore ignoring me. Not sure if I have more subscribers than he has though (not kidding).


Not sure if he's still bearish or not. I think this bull market hits him a lot if he still keeps saying top.


Just saw RP Socionomics presentation at Oxford:
http://www.socionomics.net/a-new-view-o ... z2Uhq3nW5B
Some interesting ideas, including the idea consumer economics is about rational supply and demand,
while market finance is the irrational herding instinct.
RP said investors only the demand side of the equation,
less or more demand, and the supply side is IPOs, Secondaries, Stock buybacks (more or less supply).
RP showed a chart of key EW recos since 1936, said he was sorry to have made two major incorrect calls over that time (1987 and 2000).
RP said Socionomics is economic vs. financial context with regard to supply and demand
RP provided evidence refuting claims of exogenous causality and objective financial values.
RP said the Elliott 5 wave model of financial pricing describes markets.
RP calls markets herding, rationalization, pre-rational motivation and are subjective vs. objective valuation.
RP described how social mood regulates trends in fashion, music, entertainment, the economy and politics.
Still cogitating as USA Today headline said Bull Market on Firm Footing...



tomsky wrote:Thank you all for your input. It isn't my intention to look like a doomsdayer, just wanted to show what i know and think will happen but i'm open to other ideas as well. I don't hold the truth or key to the future. It is an ideea and if just 1 person open his eyes and starts paying atention to the larger picture then i consider my post worth the trouble. I know there are longer term traders here (401k or similar type of accounts) and if he/she will not be taken by surprise and be prepared with a stop loss limit order my post won't be in vain. It's no harm to be remembered that a coin still has 2 sides although Bernanke might disagree with this.
Again, it does not necessary has to happen the way i said it, right now it's just a mere possibility. Even my beloved astro cycle could not tell the target, it just gives the direction and it's not rock solid. Also, Prechter has been bearish since 2000, calling for a drop to 1929 levels for almost 12 years! A breakout of a broadening top could be on either side (see the link to Bulkowski's examples and trading tips). And last, i'm not short yet, i'm waiting till we bust the 23rd may low, if that will happen.
I learned a LOT since i've become a member here. Thanks to Cobra i improved my skills regarding to timing. Thanks to TraderGirl found the perfect tool for longer term trading (she kept posting links to John Hampson's amalgamator site where i learned for the first time about astro aspects and trading and later found a link to the DJIA Jupiter Saturn Uranus composite cyle that become may flashlight in the darkeness). I don't know how to thank for the good things happened to me other than trying give back the wisdom i have learnt here.

I would like to keep the long term trading remarks in the other thread as here the ideas will be lost, don't know who would like to spend time searching through miriads of posts in the day trading section. With your permision i would like to copy (quote) your posts there.
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Re: Multi year major top in equities in May 2013?

Postby uempel » Thu May 30, 2013 1:48 pm

Tomsky and Heck, two or three thoughts of mine in regard to market action and analysis:

Momentum as tool:

Best long term indicator is momentum. It shows what happens and nothing else, it shows the facts, shows the momentum of the prices which were paid.

According to momentum there was a secular low in 2009 and now the markets are 4 years into a bull. Doesn't mean there won’t be corrections, but it does suggest that the long term trend is to the upside. Every big thrust has a life, and the 4 years since 2009 ain’t yet a secular cycle...

As to EW:

I like EW and I use it to check my other systems. But let’s be clear, it’s a phenomenon and nothing else.

I apply Gann grids and ellipses to find highs and lows on short and long time frames. Grids and ellipses work very well, sometimes they don’t. Now to write all kinds of books about grids and ellipses and to go and lecture in Oxford (in order to suggest these ideas are scientific) might be financially rewarding. But it’s snake oil, because these systems show only one side of the equation – and disregard all other input.

Every system which suggests it’s the holy grail is only a sect with submissive followers and fanatical opponents – just like every other cult. Sometimes EW works, sometimes is does not. Good to know the system, good to disregard the system. But to make a religion out of it – and that’s what Prechter has been doing – is kind of obnoxious.

Great businessman, but he's also a crook (like many others in finance).

Last but not least:

Should SPX break below 1600 (on a daily or weekly closing basis) there could be further downside and all action above 1600 might have been a bull trap, a mirage. Market could lose 23.65% of the 1000 handles it made since 666 and drop to 1430ish...

CS chart by Rolf Bertschi shows the secular bottom in 2009 - as does my chart with the monthly momentum shown down below in Tomsky's post..

RBertschi.png
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Re: Multi year major top in equities in May 2013?

Postby uempel » Fri May 31, 2013 3:27 am

Tomsky, you'll like this: I adjusted the dotted green line and you'll love it :D :D :D Shows long term mometum at resistance...

MomMonthly.png
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Re: Multi year major top in equities in May 2013?

Postby tomsky » Sun Jun 30, 2013 8:11 am

Arrghhhh, i've lost a lenghty post. Here's a quick summary:

Thx uempel. I was going to point that momentum is at the same level as in 2007 but the updated resistance speaks for itself. And we should watch very carefully if momentum drops below it's MA. Could you please post an update when that will happen?

Planets cycle update:
2012-2013 djia detail.png
Astro cycle detail

We are in a downtrend probably till mid july (yellow vertical line, on 07.17 there is a grand trine with positive aspects, http://www.rosecast.com/2013grandtrine.htm) then an up move should start lasting at least untill mid august if not till begining of October (red vertical line), then more down.

Now a couple of links arguing why down in the next 3 years:

Wong http://tinyurl.com/d3ojwp3
"...my view on the market is...will keep rising, until the mid of August 2013...then after an all-time-high is created in mid-August 2013...bad news will start to surface on the market...the bad news, however...will not affect the market much at first...only after 2014, the plunge will pick up speed...target of 4,000 on DJI...plunge shall end on December 31st 2016...DJI will rise again from 1st January 2017 onward..."

The planets cycle suggests the low will be around October 2016.

Cowan http://www.cycle-trader.com/
"Nearly two years before the recent stock market top Cowan published its expected date in Pentagonal Time Cycle Theory ...This cycle has special pentagonal significance only explained in Cowan's latest book. This cycle is due to return again in 2013 with even more profound consequences."

Pentagonal Time Cycle Theory (page 127) - August 16, 2013
Pentagonal Time Cycle Theory pg 127-129.pdf
(580.2 KiB) Downloaded 341 times



Armstrong http://www.10sigma.com/files/Borrowing% ... 0-2011.pdf

HS Dent http://pro.boomandbustinvestor.com/Dow_NEW1/EBNBP110/
Somehow i was able to extract the text from the video (looooong and sometimes boring), here it is:
HS Dent.pdf
text from the video
(448.72 KiB) Downloaded 175 times

Just some of what you can expect in the coming months:
•Unemployment will move higher once again – to roughly 15% nationwide – and as high as 25% if you count long-term unemployed.
•Housing prices will fall an additional 30% – despite the biggest stimulus efforts in history and the lowest mortgage rates in 40 years.
•Saddled with record high private debt ($42 trillion – an estimated $140,000 for every man, woman and child in America), falling income and no equity left in their homes… personal bankruptcies and property foreclosures will soar as much as 30%.
•With no more federal money to fall back on and their budgets in crisis, state and municipal governments will be forced into default, especially at the city and county level. Many are already teetering on the brink…
•Faced with huge revenue shortages, the federal deficit will balloon from $1.3 trillion to as much as $2.5 trillion.
•As government, corporate and personal spending dries up, the Dow and other indexes will tumble as much as 60%… reaching a 6,000 low by late 2014. Gold will melt down to as low as $750 an ounce, and likely lower in the decade ahead.
I know these are bold and grim predictions.

Dent is not exactly precise in his timings (he made some statements in the past that were either retracted and not fulfilled or modified as the targets weren't reached) but his arguments worth take a look.

And 2 more links, courtesy of xfradnex:
http://advisorperspectives.com/dshort/c ... e-1980.gif
http://www.bloomberg.com/video/is-the-u ... BT2eQ.html Mother of All Bubles :) I like that.
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Re: Multi year major top in equities in May 2013?

Postby uempel » Thu Jul 04, 2013 11:00 am

Ok Tomsky, here is an update. Red momentum is above the blue MA (SPX monthly 34) and a break higher above dashed green would be a very bullish signal :D

LTMom.png
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Re: Multi year major top in equities in May 2013?

Postby tomsky » Fri Jul 05, 2013 9:22 am

uempel wrote:Ok Tomsky, here is an update. Red momentum is above the blue MA (SPX monthly 34) and a break higher above dashed green would be a very bullish signal :D


Yeap, probably the signal will be good for an up move lasting between 1 and 3 months. Anyway, the correction from 22 May high lacks strength, waves overlaps, so it's corrective. We may get another down move next week but after will go up up up to the moon (and back :D), retesting or making new highs.
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Re: Multi year major top in equities in May 2013?

Postby tomsky » Wed Jul 17, 2013 7:27 am

The stock market is about to have a devastating decline; we will see Dow 5,000 before we see Dow 20,000
http://www.marketwatch.com/story/critic ... =rss&rss=1
SAN LUIS OBISPO, Calif. (MarketWatch) — Critical warning #17? Lost count? Here’s the latest: “The stock market is about to have a devastating decline; we will see Dow 5,000 before we see Dow 20,000.”

Beware: The sucker’s bull market of 1928 is repeating.
That’s Terry Burnham on PBS, former Goldman Sachs trader, biotech entrepreneur, money manager, author of “Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality.” A former Harvard professor of behavioral economics, a guy on par with Nobel economist Daniel Kahneman, “Black Swan’s” Nassim Nicholas Taleb, and Dan Ariely, author of “Predictably Irrational: The Hidden Forces That Shape Our Decisions.”


And yet, in spite of all this happy-talk from Siegel, Buffett and all Wall Street gurus and pundits, Burnham asks rhetorically: “Am I taking a risk in making such a dire forecast? Yes. I could be stuck with the label ‘Mr. Dow 5,000.’”

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Re: Multi year major top in equities in May 2013?

Postby Heck » Wed Aug 07, 2013 1:26 pm

uempel wrote:Tomsky and Heck, two or three thoughts of mine in regard to market action and analysis:

Momentum as tool:

Best long term indicator is momentum. It shows what happens and nothing else, it shows the facts, shows the momentum of the prices which were paid.

According to momentum there was a secular low in 2009 and now the markets are 4 years into a bull. Doesn't mean there won’t be corrections, but it does suggest that the long term trend is to the upside. Every big thrust has a life, and the 4 years since 2009 ain’t yet a secular cycle...

As to EW:

I like EW and I use it to check my other systems. But let’s be clear, it’s a phenomenon and nothing else.

I apply Gann grids and ellipses to find highs and lows on short and long time frames. Grids and ellipses work very well, sometimes they don’t. Now to write all kinds of books about grids and ellipses and to go and lecture in Oxford (in order to suggest these ideas are scientific) might be financially rewarding. But it’s snake oil, because these systems show only one side of the equation – and disregard all other input.

Every system which suggests it’s the holy grail is only a sect with submissive followers and fanatical opponents – just like every other cult. Sometimes EW works, sometimes is does not. Good to know the system, good to disregard the system. But to make a religion out of it – and that’s what Prechter has been doing – is kind of obnoxious.

Great businessman, but he's also a crook (like many others in finance).

Last but not least:

Should SPX break below 1600 (on a daily or weekly closing basis) there could be further downside and all action above 1600 might have been a bull trap, a mirage. Market could lose 23.65% of the 1000 handles it made since 666 and drop to 1430ish...

CS chart by Rolf Bertschi shows the secular bottom in 2009 - as does my chart with the monthly momentum shown down below in Tomsky's post..

RBertschi.png


Roger that u
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Re: Multi year major top in equities in May 2013?

Postby jack black » Sat Sep 07, 2013 7:46 pm

tomsky wrote:The stock market is about to have a devastating decline; we will see Dow 5,000 before we see Dow 20,000
http://www.marketwatch.com/story/critic ... =rss&rss=1
SAN LUIS OBISPO, Calif. (MarketWatch) — Critical warning #17? Lost count? Here’s the latest: “The stock market is about to have a devastating decline; we will see Dow 5,000 before we see Dow 20,000.”

Beware: The sucker’s bull market of 1928 is repeating.
That’s Terry Burnham on PBS,


Not sure about the 5,000 prediction, but there is no question in my mind, long term, equities are going down in real values.

Not sure of nominal values. Whether we go the Dow 5,000/gold 5,000 route or Dow 50,000/gold 50,000, I simply don't know.

Thanks for the heads up on this Terry Burnham guy. I will read up on his thing.
BTW, Marc Faber is saying 2013 is going to turn out 1987 style.
There are too many red flags to ignore.

And the Syria thing now. Are we going in because Iran has nukes already?

Full disclosure:
long gold, PM, and miners, short equities (small position opened at the beginning of August).
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Re: Multi year major top in equities in May 2013?

Postby pezhead9000 » Fri Sep 13, 2013 9:55 am

FWIW: WSJ TSM Money Flows. Blue = Stock price, Green = Block Money, Red = Total Money.

It appears that as the market has been rising the money flows have been flat since Feb/March. No major divergence yet as seen in Summer '11. As it appears to me and if these flows really correlate.
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Re: Multi year major top in equities in May 2013?

Postby jack black » Wed Sep 18, 2013 11:21 am

Here is my chart that shows we are very close to toping.
Notice lower highs on $NYAD, and lower tranding of relative streangths of leading sectors and new SPX highs.
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Re: Multi year major top in equities in May 2013?

Postby jack black » Wed Oct 23, 2013 8:07 pm

I just realized the US equities DID top in may 2013 already. We just forgot to adjust for the falling dollar. Here is the proof:
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Re: Multi year major top in equities in May 2013?

Postby jemmy » Mon Mar 09, 2015 1:31 pm

Thanks for info!
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