World Indices Roundup 2019

Thanks @itsmescottyc

Here are my thoughts on China. I’m quite bullish on Asians markets overall but China warrants discussion. China has now entered its second lost decade with the Shanghai Composite still down more than 50% below its 2007 high. The Shanghai Composite is in a fourth wave at Cycle degree – a very large wave degree. Fourth waves are corrective and I believe it is tracing out a contracting triangle at Primary wave degree. This means that Primary wave A (circle), B (circle), C (circle), D (circle) and E (circle) are constrained by the two trend lines which converge to a point (like a triangle). When it emerges to the upside in Cycle wave V its economy will roar.

However, at the moment it is in Intermediate wave (Y) of Primary wave C (circle). Intermediate waves (W), (X) and (Y) are labelled like this to distinguish them from the earlier ABC correction Intermediate waves (A), (B) and (C). So, it can be viewed as being in a C wave, Intermediate wave (C) of Primary wave C (circle). C waves are devastating for economies because collective social mood is so deeply negative which drives social action that reflects this mood (e.g. contraction of business/manufacturing, loss of jobs, IPOs stop listing, consumers sentiment wanes and they stop spendingetc). This is why there is so much bad economic news coming out of China. Despite this China still manages a >6% GDP growth rate. Just a warning about the chart, do not try to deduce any precise dates for the completion of Primary waves C (circle), D (circle) and E (cycle) of Cycle wave IV. The path shown is just stylised. However, it is not inconceivable that Primary wave D (circle) could reach a major top in say 2024-2025 (i.e. lines up nicely with a forecast for major tops in US market indexes which could also be in 2024-2025 which then means 2019-2020-2021 sees a "panic" and "low" stock prices as per WD Gann's Financial Time Table).

 

This dude does great analysis:

Does the bull market have 1 more year left, or is the end already here? - Bull Markets

Quite balanced in writing too.

 

I like to be contrarian and look for extremes in sentiment indicators. Bull markets don't end on bad news they end on great news.

Japanese candle sticks, trend lines/channels and other indicators are useful but my knowledge could be expanded. I see they mention the "Death Cross" where the 50-day EMA moves down through the 200-day EMA. DJIA has displayed the "Death Cross".

 

@Alex Straker would you say the road map is similar for the SPY - maybe down for FEB 2019, then drift higher to JUL/AUG 2019 then down to NOV/DEC 2019 for a major low? I know they are completely different markets, but I am curious what your overall take for the SPY is. Thank you for your opinion

@kitdoctor does your charting align with Alex's roadmap for the XJO and the US markets?

 

@keroppi you ask great questions but unfortunately it's very difficult to answer with the detailed specifics you are after when we are talking about unknown future market behavior and two different markets with only partial correlation

What I will say at this stage is SPY is now likely to top out in the next couple of days at around 2,813 for at least a minor degree top and maybe this will turn out to be more significant.

The burning question is will the prior top at 2,940 hold or get taken out, and if so by how much?

My personal view is still that the top is more likely to hold during 2019.....however, if it does get taken out this will only be a minor and brief occurrence. I maintain the same view as my prior SPY forecasts in this thread, based on the time cycles and current pattern there is still a strong chance of decline into NOV/DEC 2019 with a significant low likely in this period. IMO there is a better than even chance of this low being in the 1,800 - 1,900 zone for SPY.

No advice

 

@Alex Straker any thoughts on China’s Shanghai Composite Index surpassing the 200 day moving average recently?

 

It's a bear market rally. Don't be fooled. The larger degree wave trend is down.

 

Here's a chart. Just remember when I draw a chart with arrows showing the overall trend, that's all it is the overall trend. There will be smaller ups and down in that overall trend. Once this upward trend exhausts the down trend will resume. Wave (Y) consists of three minor waves, one down (now finished), one up (in progress) and one down (yet to commence).

 

Thanks @kitdoctor I agree this most likely has more downside yet.

@Redwing I don't have a lot of existing chart work on this index but will see if I can pinpoint some good support levels and post a chart here soon

 

China has opened the floodgates to funding which is propping up markets. I'm watching carefully to see if my chart requires adjusting.

 

Had a bit more time to look at this index......some impulsive movement on Shanghai Composite this week!

I zoomed out to take a look at geometry and timing. There is a case for a reversal here however this is a notoriously volatile instrument so exercise caution even when price action looks convincing.

1. Expected timing zone for complex correction to the prior major move has been passed recently (ABCDE correction)
2. Cluster of cycle timing points on Lucas/Fibonacci numbers occurred on the low (199, 144, 48 (47)) & there may be more if I spent longer looking.
3. Some Fib cluster support.
4. Action-Reaction geometric support line on red Schiff median set caught the low (dashed red line), also failure to reach the green warning line before retracing to the red Schiff upper median parallel is bullish.
5. Price action in recent weeks has become noticeably more impulsive.

If you are looking for an entry to this market you could wait for the first retracement to the impulse (most likely to be a zigzag/ABC), I will update when appropriate.


SSEC


No Advice

 

Forgot to mention there was also an increase in volume of trade this last few weeks....



No advice

 

Important update re world indices.

When I first started this thread I posted my convictions and chart evidence for a solid downturn to begin very soon on world indices. A few days later SPY recorded it's biggest 1 day fall in history and you all saw what happened with the eventual spike down to 2,370 area on SPY and similar moves on other indices. I also posted a warning just prior to the second fall in 2018.

The time has come again

The same pattern that caused that fall is still unfolding and there are a lot of hints we are now due for the next downturn to commence. SPY is likely to begin this downturn essentially from now (I give SPY 3 weeks at best but more likely to see it begin in the short term - as in the next few days).

I'm sure there will be plenty of other opinions on this and I may well be wrong. Just wanted to give a heads up for what it's worth. I will only focus on SPY here for now, other indices will be similar, if SPY catches a cold they will all start sneezing. XJO has also hit resistance as has DAXX etc.

So here's the technical picture.....

SPY Monthly

You have all seen this chart many times. SPY is still following the curve of the red arcs and has just made a 'balancing move' across the blue median line set with this recent run higher (action-reaction principle). The balance point has now been reached plus shorter term view show several harmonic resistance lines intersecting right at 2,853 area for SPY.

SPY Daily

There is also the same strong time cycle active that hit near perfectly on the recent 2 highs plus the recent low as well (see major highs and lows on Daily chart above, they all fall on these cycle lines H-H-L-H). There is much more time based evidence that this downturn is due (not shown) including a large cluster of multiple time count hits that is centered around 19/20 March.

Add to this there has been a lot of evidence of buying accumulation of BBUS and BBOZ recently. Note the sustained volume increase recently for these 2 vehicles, the likes of this this has not been seen before in the history of these leveraged 'inverse funds' or 'short funds' particularly on BBUS! Stop and think about this for a minute.

BBUS has been heavily accumulated over many weeks in the $4.00 - 5.00 price zone.....hmmmmmmm ) Someone with deep pockets clearly believe there is a problem coming. If the volume of accumulation is a guide to the size of the problem.....well......you get the picture.

BBUS


BBOZ


XJO Weekly

XJO has been unable to break multi-line resistance, this chart gives some hints to the targets I am eyeing off on the downside Don't want to say to much here, if you are serious about following my methods and making use of this stuff for yourself, I suggest looking in to my TA course and private facebook group. Ask around some of the members what kind of profit they are already into

Summary: Only my opinion.....we are on track to see a volatile downturn begin from essentially now (3 weeks tops) until late 2019/early 2020. There may be many cruel 'whipsawing' volatile moves down and up during this period that can re-test highs and lows, this tends to 'psych out' the weaker hands in the market and force them to take losses, don't be one of them. Make a decision to act on YOUR plan and stick with it.

No advice

 

Hi @Alex Straker fantastic stuff as always. It's exciting times, if that doesn't sound too cruel.

Your targets in the charts above for XJO seem to align somewhat with your prediction last year of a 4700-4800 low. Would this therefore constitute the 'sharpest accumulation opportunity remaining this century' as quoted above...Or could there be even further to go once this retracement completes?

Please keep the insights coming. Always fascinating to read.

The irony is that the mainstream media is referencing a 'golden cross' meaning it's time for a market surge. Interesting times.

 

Yep, re media that is not surprising in the slightest. I decided long ago that listening to mainstream media on financial matters does more harm than good. There is only one path to success, decide on your pathway and find the mentors you will need, acquire your own skills, develop a plan (which is always 90% risk management), then get to it!! Oh.....and ignoring media is essential to success otherwise your psychology will keep getting dragged in the wrong direction and it becomes difficult to fight it over a prolonged period.

Targets I spoke of are the best ones I know of for now As always time will tell. Longer range forecast says we are in for a another round of volatility around 2022 but I will address that more specifically as the time comes closer.

 

Long Range Forecast for XJO

Date as I am posting this is 20 MARCH 2019

I don't intend to explain why but I have high conviction on this forecast right now. I believe over the next year or so the market will proceed fairly precisely as per the chart below.

Just prepared this chart,not showing everything but active timing cycle has 2 versions. This one is the most likely of the two. Other possibility is the low of the first drop comes a month or two later and the whole cycle runs a bit later than on the chart.

XJO


No advice


For those who may be interested...

Recently I have been in discussions about a book deal with the leading worldwide publisher of W D Gann based methodologies. It will be a detailed record and teaching manual of my understanding of the true methods of W D Gann. Gann is a contentious figure to say the least and often incites heated debate among practitioners as to what the true methods really are. Gann kept a huge amount of his methodology to himself believing others must earn the right through diligent study to progress and discover the truth of market harmonics for themselves.

To really understand what he was doing it is useless trying to follow the information in his courses' as they only reveal a tiny fraction of the true methodology he applied. The best quality information he only left behind in 2 coded 'trail of breadcrumbs' in his books "The Tunnel Through The Air" and "Magic Word". These books masquerade as a novel (poorly written novel - deliberately done so people could figure out there was other information of importance coded in to it!) and a self help book. They are really works of great genius and contain such important information I cannot begin to describe the implications of it all.

Most practitioners of 'Gann methods' are MILES off track and many quit in disgust thinking it just doesn't work. Gann world reminds me of "the blind leading the blind" it is so ridiculous the stuff being peddled in his name. There is more Gann garbage per square inch of internet space than any other trading/charting related topic.

My book will demonstrate how Gann's methods have been partially re-discovered with Elliott wave theory & Dr Alan Andrews market geometry as well as the work of some other 'silent' geniuses I won't disclose here. Gann's work is tremendously deep and complex but at the same time elegant and simple when you KNOW. (You will know when you KNOW). It unifies and explains the reasons Elliott, & Andrews' methods are such excellent modern day charting skills to acquire..... as is Harmonic Pattern recognition and Fibonacci based methods (closely related to Elliott). This book will be one mammoth tome and it may set a new benchmark for the highest price book of all time and I am NOT kidding in saying this. I can guarantee it will be priced well over $5k and maybe much more. Even then it would be FAR too cheap, that's how valuable these methods are to me

The book is looking highly likely to come to fruition over the next 1-2 years. Partly to celebrate this new venture, and partly to put one of the more important forecasts I have made of late on record for the publisher, I have decided to post this long range forecast of XJO above. And before anyone asks, this forecast was done using Gann methods I have not disclosed to anyone ever. It is also confirmed by Andrews market geometry.

 

@Alex Straker - thank you for sharing your knowledge with us here. I really appreciate it and love to read your predictions.

 

Alex, a fellow named David Bowden mastered Gann 2 decades ago now.
He also made highly accurate predictions for ASX and individual stocks within.

https://safetyinthemarket.com.au/about-us/

 

Beginners stuff compared to what Alex is offering. I did SITM course many years ago and know others who have also done it. Just the commonly known GANN stuff. The success stories are very few and far between.

 

I am no technical analysis person but based on my little understanding on that chart I think it says XJO will be approx 4860 around August 2020. Is that correct @Alex Straker? If so we are talking of 21.6% correction from current 6200 level?

Cheers,
Oracle.