Here is a 10 point box, 3 box reversal chart of the cash S&P 500 going back to May of 2008. It presents a longer term picture of where the market stands and of its possible future movements.I have drawn a series of 180 point boxes which I think have been controlling the market's movements for the past 20 months. The May low occurred at the bottom of the third box and the April high at its top.
I think the April-May drop was this bull market's midpoint correction. I think that the next upswing will last well into 2011 and carry the market at least to the top of its fourth box and more probably to the top of its fifth box before this bull market is complete. Note that the first leg up from March 2009 at 666 to April 2010 at 1216 carried the S&P up 550 points. Duplicating this move starting from the May low would imply an eventual high near 1590, the 2007 top. A shorter upswing that carries the market up a fibonacci .618 of the initial 550 point swing would carry to 1380, close to the top of the fourth box.
11 comments:
Carl,
The boxes seem to fit, but it also seems that different size boxes might fit as well. Why not replaces the lower three boxes with two boxes and expect more of a decline before the market takes off to the upside? Thanks.
Fred
Thank you so much.
Amazed...My guess and work following you100% goes so close to the analysis.
I was wondering this scenerio to happen.
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Thanks for your wise comments and charts. BTW the 5 day $VIX EMA line has now crossed below the 20 day EMA line which has been a reliable buy signal.
1083.25 is the key from now on on a daily close. Must be above it.
I see 1071-1074 as the low area by June 15/16 and then a move past 1107.75 with a daily close above this number should take us on our way.
1122 area after the gap fill at 1113 may be a hiccup but the first key is 1126.26/1134.
Once this market is perched past 1134 we move up to 1216.75 and above.
My scenario differs from Carl as I see the DX (US index) dropping to 78/79 by Aug 10/11 2010 then move sideways building a base and by this time gold should have made its highs at 1380-1400. Then the DX goes to 95/96 from 78/79 while gold falls to 750-640 by June 2011.
This implies the indices will also fall with the ES getting to 870-900 area by June 2011 from 1240-1307.25( this high by Aug/Sept 2010).
From here the ES will move up 4 fold into 3,200-3,600 by 2015 and 2012-2015 will be like 1996-1999.
The DX will fall to 41 by end of 2012 or early 2013 and this will propel the indices, metals, grains, softs, etc. to new highs.
So the DX is the key. First 78/79 by Aug 10/11 then 95/96 by June 2011 then 41 by end 2012/early 2013and then 165 by 2019/2020.
You just need 1 commodity trade to make you rich....run it up and down.
Too much analysis is a sure way of missing the obvious. And that is:
Rallies fail in bear markets!
Moreover, three strikes in an attempted breakout of the 200 EMA means that the market is a captive bear market, for a long time to come.
If you look at a chart of The Investor Sentiment Cycle it matches this chart and looks like we are now starting the aversion phase which would carry the s&p market down about 180 pts from here ..just sayin http://invivoanalytics.com/2007/12/07/the-sentiment-cycle/
Hi Carl
while i admire your bullish bias
since i too have a longer term bullish bias . the problem is with time. 15 yrs 3 months to 16 yrs 3 months low to high count does make the case for a decline even if a weak one.one thing to consider though is that nov dec 1994 was a significant break out to the upside ,hence it was a bottom that has significance. the 414 calander day rally from low to high in 1961 is very similar to the last one on a monthly chart . and then there is the 12 yr 3 month to 12 yr 8 month high to low count from the jan march 2000 peak . also to add to this if we are to add 12 yrs 3 months from the may 1998 top or the final high in july 1998 , we would still be looking for a low
as early as oct 2010 (long term ) . yet when putting it all together . we have
15 years 8 months from april 1994 to the jan 2010 peak and if a similar comparison was to take shape from the nov 1994 low then august 2010 would fullfill the time comparison for a top . from that peak we would head lower into oct 2010 -march 2011( 12 yrs 3 months/8 months from the july 1998 peak )yet we still have the larger cycles point for a low which is due from mid to late 2012 .my question carl to you is simple. how do you allow for this to be a mid point of a larger bull market with the larger time cycles are pointing lower ???
joe
14 June,
1080--1102
Nearby resistance was 1092/1095, then hourly gap at 1098-1100,followed by 1107-1114 clustered resistance.This includes the 1108 200 day moving average. nearby support is 1087/1082/1078/1077/1072.
Amazed and totally moves within on Carl's guess estimates.
read the book,then blogs and no difficulty to capture the moves in ES_F!
WISH Dr.Carl Futia Everything best in life!
Carl
I thought this would interest you, given your bearish view on gold: gold was featured on the cover of the Sunday NYT.
http://www.ritholtz.com/blog/2010/06/uh-oh-gold-on-the-front-page-sunday-nytimes/
startling forecast!
Kishore,
There is no analysis, only predictions. I only use a chart and no indicators.
Like playing soccer with the great masters, Pele, Cruyff, Socrates, Eusebio, Maradoan, Zico, Puskas, Di Stefano, Tostao, Garrincha, Ardilles, Gemmil, Jairziho, Platini, Rivera, Grabowski, Lato et al...you learn your skills from the street...NO camps, schools, books, videos and coaching programs. That's why they become great. NO different in trading.
1 month ago or more I told all Coffee will be making a move and by July/Aug will be at 170. Its percolating now!!!
The guys with the analysis were the ones who wanted to short Coffee..these are the guys who get up to go to a job 9-5 on Wall Street.
Yes, rallies do fail in bear markets, but as I trader I do not care about bull or bear markets just prices and time.
Coffee will go into an SC from July till Dec between 170-147 and then explode to 250-316 area by 1st half of 2011. Yeah..who needs the ES.
Beans, OJ, canola, CAD, AUD, Euro, yen, wheat, corn...so many markets...all percolating, waiting to explode up and some down.
The only question on the ES is at what time and price does it breakdown...my guess is on the my comment above and I differ from Carl.
But taking a page from Carl, its better to be an optimist than a pessimist. Pessimists like Prechter make NO money and the guys who control the "GAME" the bankers have to take it up to make money as most people "buy and hold"
Millions upon millions of people buy and hold and lose to a few who make billions. That's why they have to take this up and each crisis on the news in the media etc. they just reload for the ride up. They control all aspects on the GAME!!!
Simple, but nobody gets it.
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