in last night's and the prior night's updates, Peter Eliades has begun to warn of an impending CRASH based on cycles and other works. I've posted his most recent 3 letters. You'll see that he made no mention of the CRASH Monday night.
BTW, another "cycles-guru" whose methods I've used, is Walt Bressert and he is looking for a continuation of the bull market for another year or so (4-year cycle)
Here are Eliades' most recent 3 letters:
Stockmarket Cycles update for Wednesday May 3rd.
Yesterday, we spoke to you about a pattern that was being followed by the
Nasdaq 100, a pattern similar to the topping patterns in 1929 and 1987 that
led up to the crashes in those years. Today's market action did nothing,
of course, to change the
pattern. In both 1929 and 1987, it took approximately one week or a little
longer after the secondary top had been formed to break the low between the
all time high and the secondary top. If the pattern were to continue here,
it would mean we were
still around one week away from a break of the recent lows on the Nasdaq
100. Let's also refresh your memory about the so-called Gann death zone .
Such a time zone occurs 49 days after an important market top, in this case
49 calendar days, and
that would take the market to Friday May 12th. In both 1929 and in 1987,
the sharpest part of the declines leading up to the crash began right after
the 49th day. We should again caution you that crashes tend to be
generational occurrences, and any
attempt to forecast them must be viewed with a skeptical eye. In the case
of the current prices on both the Nasdaq Composite and the Nasdaq 100, it
seems less foolish to be looking for the possibility of the crash, so we
will continue to keep you
posted on what we consider to be a potential crash pattern.
Stockmarket Cycles updates for Tuesday May 2nd.
The decline in the Nasdaq 100 index of over 35 percent from March 24th to
April 17th was the largest percentage decline in a United States securities
index to ever occur within a month from an all time high. usually , the
extent of an initial
decline from an all time high is a good indication of the magnitude of the
total decline that will follow. There are those, of course, who believe
the staggering decline in the Nasdaq 100 index is over. We are not
included in that group. There is
a very interesting pattern that has been set up on the Nasdaq 100 index.
It is a pattern that we usually follow very closely after any all time high
is seen. In both 1929 and in 1987, the period of time from the all time
high to the secondary highs
which preceded crash-like conditions was exactly 38 calendar days. Don
Vodopich , a fellow analyst, pointed out over the past day or two that the
period from the Nasdaq 100 index all time high of March 24th to yesterday,
May 1st, was 38 calendar
days. Let's examine what we're looking at here. Arguably, the Nasdaq
Composite and the Nasdaq 100 index were the most overvalued stock indices
in history between their twin peaks of March 10th and March 24th. They
suffered the greatest magnitude
initial decline in history from an all time high and they have now rallied
back less than 50% of the initial decline. In fact, the Nasdaq Composite
Index regained almost an exact Fibonacci retracement of 0.382 times the
complete decline. This is
the pattern that has been very similar to the patterns of 1929 and 1987
that preceded the sharp declines that led to market crashes. Is that what
is about to happen here? Whenever we discuss a potential crash pattern, we
always issue a strong
disclaimer that makes it clear that crashes tend to be generational in
nature. To attempt to predict them is usually foolhardy, but when patterns
matchups so very closely, we want our subscribers to be aware of similar
circumstances in the past.
Stockmarket Cycles update for Monday May 1st.
It has been a very long time since we have seen the type of divergent
projections that are being given on the Dow Industrials currently . The
following projections have all been generated on the Dow's theoretical
intra-day, calendar day projection
chart.
A nominal 10 day projection to 10,368.11 ñ 90 points.
A nominal 20 day projection to 11,502.73 ñ 140 points.
A nominal 10 week projection confirmed today down to 10,047.21 ñ 180
points.
A nominal 20 week projection up to at least 10,866.
All of the above projections are given on a theoretical intra-day basis.
As a general rule, you can subtract anywhere from 70 to 150 points from the
Dow's theoretical intra-day projection to get a rough estimate of what the
actual print projection
would be. Despite what has been incredible volatility on a day-to-day
basis in the stockmarket, we doubt very much that all of the above
projections can be satisfied.
There has been a definite improvement in market breadth, and a definite
improvement in the new high-new low data for the New York Stock Exchange.
Whether this is in an important turn of events or not is too early to
determine, but it is something
worth watching. Here are some of the Trading Index moving averages after
the close today:
Simple 10 day =.889
Open 10 equals 0.841
New 10 = .808
The reading on the New 10 Trading Index rendered a technical short-term
sell signal today. Technically, it was lower than 0.80 on Friday and
higher than 0.80 today. But today's reading of 0.808 barely qualified as a
sell signal. We should also
note that, although the last few signals from the New 10 TRIN were quite
good, it is not unusual to see the market move higher before the actual
sell signal takes effect. Remember, we're still in a period of positive
seasonality for the Stockmarket,
and the seasonality will remain positive through this week. That does not
guarantee a rising market, but end of month-beginning of month positive
seasonality has worked quite well over the past several years. That
positive seasonality ends at the
market close on Friday, May 5th. |
