• 557 days Will The ECB Continue To Hike Rates?
  • 557 days Forbes: Aramco Remains Largest Company In The Middle East
  • 559 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 959 days Could Crypto Overtake Traditional Investment?
  • 963 days Americans Still Quitting Jobs At Record Pace
  • 965 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 968 days Is The Dollar Too Strong?
  • 969 days Big Tech Disappoints Investors on Earnings Calls
  • 970 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 971 days China Is Quietly Trying To Distance Itself From Russia
  • 972 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 975 days Crypto Investors Won Big In 2021
  • 976 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 977 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 979 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 979 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 982 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 983 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 983 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 985 days Are NFTs About To Take Over Gaming?
Boris Chikvashvili

Boris Chikvashvili

Boris Chikvashvili was supposed to be a theoretical physicist (Russia+Jerusalem Hebrew University, MS Physics, with distinction, toyed with QUARKS). Somewhere on the road to PHD…

Contact Author

  1. Home
  2. Markets
  3. Other

Dow November Top Prediction, Pattern Based

Dear Readers, In May 2014 I predicted here that topping pattern was developing in DOW and Stocks In General.

While, did not suggested immediate selling, the warning was given that DOW may underperform bonds going forward and caution was suggested. That fits into our YBR ( Yellow Brick Road pattern long term pattern predictor). Today we publish another confirming pattern with 9 signals under the belt since 2004, with nice top predictions of various sizes lasting from few weeks to few months.


Stocks

Graph below clearly indicates the patterns developed during the last 9 signals of the nature we discussed above and nice adherence to it by the signal generated last June.

While we are unable to bring longer future view, we do like to warn you that top of lasting duration is likely in November 2014 and that confirms also top of a lasting duration by YBR, which has practically last rising hump in November before heading lower for several weeks, at least.

As suggested the classic valuations (including Buffets own, Stocks Capitalization to GDP ratio) are flashing danger signals. Our Sentiment is predicting the fall in the markets and our technical, cycle and pattern studies are confirming the probability of a sharp drop from November.

The most peculiar feature of such prediction is that it seems to be coming when nobody expects it November to March are one of the best seasonal times and election cycles predict nice move up etc. Well, we shall see. We shall see.

YBR Chart Updated
Larger Image


Bonds

Last time we said bonds are better buy than stocks. That has been the case overall and twice (August and October) the DOW was negative on the year, while bonds moved higher consistently. Now we do not like either one of these instruments on a long term bases, but in intermediate term we would chose the out-performance by bonds. Of course we have technical limitations at which we will stop our capital committed to this idea. So nothing is followed blindly.


EURO

Last time we indicated Euro was in danger after colliding with 1.40 level. Indeed it has dropped 10%+ after touching 1.3994!

While we could have few more days of Short Term weakness, over mediate term of 3+ weeks and long we expect spike against Dollar, and decline again.


YEN

May have even better chance and outperform EURO, after few more weeks of short term weakness.


GOLD

Last time around we thought June/July gold could pick up along the seasonal and cyclical up-trends, while that happened the move up was not strong and suggested next cycle lows would be lower than last three standoffs at 1180 or so. We got that and may soon start rebounding, but are likely to see another bout of lows in mid 2015, which could prove more suitable base for stronger / sustained move up


OIL

We liked to short OIL, but refrained from doing so last time, due to geopolitical complications, which we still think will play role for OIL prices. Now, we continue thinking that OIL may have some more weakness before a longer term sustained move shows up and that is also, likely to show up sometime during / after Winter of 2015.

Due to Low Latency + HFT trading Infrastructure + software development commitments we suspended a short term trading advice for close to two years now, We still continue to manage money and provide an intermediate / longer term advice to members though.

Our motto is taken from Shota Rustavely, 12th century great Georgian Poet and Philosopher, who said: "You Find what you give, all else is lost."

 

Back to homepage

Leave a comment

Leave a comment