Well… here’s my Dow Jones Forecast for 2013…Happy New Year and welcome to my Dow Jones Forecast for January 1, 2013. I always enjoy this time of year, kicking back and reviewing all of the predictions for the upcoming year and beyond.
For the first quarter of 2013 the Dow Jones Industrial Average (Papa Dow as Ralph Acampora calls it) is going to bounce around with support at a around the 12500 area, tormenting the hell out of investors. There are probably going to be calls for the end of the world in the financial industry and the big bear market ahead. They right of course, just early. The tormenting should end around the end of February… beginning of March
Between the beginning of March and the end of August, there is the high probability of a fairly descent move in equities… higher.
With a bottom in place for equities around November 4th…
Here’s the kicker…The ultimate pivot point is February 24th, 2014.
There are many other short term pivot points between those dates mentioned above but the medium term Swing Trading Forecast cycle is what I’am going off of.
Your probably saying to yourself, how can anyone come up with a forecast for the financial markets a year in advance? I have to agree with you, no one can predict the future. There is one way, and only one way, cycles. I spent years looking at the markets reading the books from the market wizards of the past and come to one conclusion. Just like a cowboy rounding up a herd of cattle, the cowboy and the horse he’s riding has a pretty good understanding what the herd’s going to do before the herd even does it. The patterns in nature are all similar, read this article I wrote about murmurations in nature http://www.swingtradingforecast.com/public-mood-state/ this will give you an idea of what I mean.
Cycles are a part of nature and since humans are a part of nature, cycles apply. The combined hopes and dreams of everyone are show in patterns on a chart, the visual image or road map of the financial markets. Just Google “starling murmurations” and go to images on the search engine and you’ll see what I mean, it’s amazing. Read about theories how the Starlings accomplish these patterns. Human nature isn’t really any different, in my opinion.
I’am going to show one chart below, only because I don’t have to do an in depth complicated analysis. It’s the end of the year and the chart I’am going to show you is a Dow Jones 100 year…yearly… chart.
- The first thing you’ll notice is the expanding triangle in the chart. This is key for a couple of reason. 1/ it’s a continuation pattern, when the price exits the triangle the next move is it’s final move. 2/ Elliott Wave Theory
1. Wave #2 Cannot Retrace 100% of Wave #1
2. Wave #3 Cannot be the Shortest Wave (but does not have to be the longest)
3. Wave #4 Cannot Enter the Territory of Wave #1
Triangles least likely in wave 2 position and most likely in Wave 4.
- The second thing is the channel from the 2003 low to the 2009 low and the 2007 high to where we are at right now, literally. So in theory we could be at the top right now and if the Dow smashes through the 12500 area look out below. The channel could also be an ABC consolidation, if that’s the case then the 2009 low is behind us and we can only look towards blues sky’s ahead.
- The third thing you’ll note are the channels, they provide areas of overall support/resistance ranges.
- The fourth thing are the 2 plausible lows around 2016/2017…I think personally that we are in a wave 4 corrective phase inside an expanding triangle and a low that should be around 5500. We can’t rule other things as well, like a low down to 1800 or so, that is highly probable too.
- The fifth thing you’ll notice is the target after the 2017 lows…100,000…I know, ridiculous isn’t it. I look at this chart everyday and wonder, is it possible? Anything is possible in the market. The key to understanding the possible future of the market is knowing that the market (mother nature) is fractal. Look at the minute chart and zoom out to the yearly chart. In most cases the long term chart is more valuable than the short term chart.
- The sixth thing you’ll notice is the Stochastics indicator. the Dow Jones Industrial Average hasn’t had crossover yet on the yearly chart and is still on it’s way up to tag the resistance line shown. If were to zoom in on quarterly, monthly, weekly, daily, hourly ect. we would see a different picture.
- The seventh thing you’ll notice are the Fibonacci Retracement lines. I use Fibonacci a lot to forecast entry exit probabilities. I’am not going to get into it here, I could right a book on it.
Well…there you go…that’s my take on the year ahead. My Dow Jones Forecast, January 1, 2013 is not written in stone, but shouldn’t be too far off.