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[Wave59] Dow Industrials - the next 6 months

发表于 2015-12-7 00:47:02 | 显示全部楼层 |阅读模式


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Hi Everyone,
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I had two people contact me about the UTM Forecaster today, so I took a look to see how things had progressed since the last time I checked the forecast out, and thought I'd post a quick update. Given that the board is now completely open, for those of you who aren't familiar with this tool, it's related to the techniques in the "Big Bertha" course, and uses those tools to generate a rough forecast. This forecast is NOT meant to be a turning point detector (although it works that way too), but is meant to give you an idea when to expect bull and bear markets. As long as you use it in that particular context, it's called every crash since 1900, which is mostly what I use it for, given how long term it can be. 0 }: h" |9 l3 O4 F* y
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Anyway, here's the chart:$ o: T+ Q- V9 B% P1 i6 l- a

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icon_e_biggrin.gif UTM Forecast through early 2016utm_forecast_end_of_2015.png (37.1 KiB) Viewed 163 times
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The red line is the forecast line, and this particular solution was originally computed back in 2011, for use in the conference we had in London. The legs up through 2013 and 2014 were part of a larger bull pattern that began after the crash cycle starting in 2011. Notice that the nature of the markets in 2015 has followed along perfectly with what we expected.
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Although I mentioned that it was not meant to forecast turning points to the day, it has nevertheless been doing that very well the last few years. More interesting than that is what happens when the points are early or late. In those cases, they tend to be 28 calendar days off the market each time, which is a VERY interesting number, especially to the Bertha crowd. That's because 28 days is actually 1/16th of 448 days, and we know that according to Bertha's rule of alternation, those are where we expect different points to end up when the market has to repeat itself, but doesn't want to repeat in the exact same way. I've marked a couple of those places off on the chart with the bar counter. (FYI - If you can't see the chart well on the board, you can right-click on it and open in a new tab to expand it out).
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: x' \: f, y* v2 h$ [* jAnyway, looking forward, the forecast says that the overall pattern we're working in is a bear pattern now, and that we've just moved into the upward correction phase of that pattern. That will happen until Feb 25, 2016 (give or take 28 calendar days!! ), at which point things start looking seriously ugly. I'm not going to go so far as to call for a crash, since this is more broad-brush than anything, but I will say that I will bevery surprised if we don't get some nice moves to the downside in 2016. Of course, there could always be a larger cycle at play that modifies this whole thing, in which case we'll see bear moves get converted to flats, which is still correct behavior. / s2 ]9 g8 u3 u6 R3 x. j4 `# Q

6 z3 |! j7 W! _# W" M- s9 XTwo anti-bear points to keep in mind:
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1) 2016 is also an election year, and those tend to be quite bullish.
# R9 A# \9 B) [, s/ ~1 S2) I'm making a public forecast, which means my odds at being correct go way down compared to if I kept my mouth shut and just traded this. icon_e_confused.gif
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8 y: U7 X2 C- b) W' o3 T% t9 NAnyway, all for now. Early 2016 will be a good time to do some analysis once we've got more data in hand.6 x# t$ X) P: j/ o3 L' E* w9 ]3 r3 x
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Thanks! Actually, this particular tool has a pretty interesting history. I originally stumbled onto it when looking at really old Dow data, so it was really born in the early 1900's. Check it out:6 q5 v' Z8 m0 y! p9 ^

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UTM Forecaster in the early 1900'sdow_utm_1900_1917.png (53.9 KiB) Viewed 136 times
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You can see how well this tracked back then, and how someone could have really cleaned up in the stock market had they been using something similar. I'm not going to claim this as a 100-year old forecast, since I only figured it out in 2010-2011, but it actually has it's roots back in the 1900's, when I was curious to see what it looked like back in Gann's day. Although it's complete speculation on my part, my belief is that Gann used something very similar to Bertha in his own analysis, because so many of his comments make perfect sense when taken into context of what we're doing in UTM. Which leads us to 1929...' T9 j' b9 {7 {% @

, v" m6 l. x* a' u( _; rIt was rumored that Gann was able to correctly call the top in 1929 (and actually sold the information to a number of big instututions), and is also rumored that while correctly calling the top, he was off about the bottom, and incorrectly bought back halfway down during the decline. Sort of like this:
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icon_cry.gif UTM Forecast 1929dow_utm_1929.png (31.77 KiB) Viewed 136 times
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A-B is where a downward cycle gets washed flat due to a longer term upward cycle, which the algorithm isn't tracking, so then we run up into point C, the high in 1929. Then we get the huge crash, and here's where not only the larger cycle also points down, but even the massive one above it points down as well. And that's how the upward swing in D-E gets completely flipped over. Back then, you'd have seen the market correct to 0.625 (or 0.618 in today's way of looking at it), seen the cycle low at D, and would have thought to go long right there in 1931, having no clue that the market was actually going to lose 90% of it's value instead of only half. Ouch!  
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! b. Q/ b9 n" [# u, BAnyway, that failure actually lead to a pretty huge breakthrough on my end, since it was proof of the really massive, really powerful cycles that happen behind the scenes and are responsible for the "skew" in the forecast, and also the really insane crash days in the stock market. In Bertha-speak, this is the "11:11:11" cycle. It's too slow to really trade in a daily sense, but if you're around long enough you can be there for a couple of them. Next one is due closer to 2028, so still pretty far away, although some people on this board will likely be trading at that point in order to take advantage of it. (Personally, I'm planning to watch that one from the sidelines in my secret island hideaway. ); s/ I1 m; e# F
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