Shanghai Composite Index, Buy Signal has a B wave triangle. The next flow of money is going into the Shanghai Composite Index.
The flow of money is always going from one sector to another, from one country to another. I looked at over twenty online news sources this weekend and 2 things stood out. Nothing was mentioned about the spike in gold Friday, September 7th, 2012 and the negativity of the Shanghai Composite Index. To me that’s an invitation to buy.
Therefore….The world is going to have a change in the flow of money.
Pivot point dates are for the weeks of:
- September 24, 2012 with a small pivot on September 11th (coincidence huh) The German supreme court is making a ruling on whether or not it’s constitutional to bail out the other Euro countries.
- November 19th, 2012
- December 17th, 2012
- February 18, 2013
- March 25, 2013
- May 13, 2013
The chart of the Shanghai Composite Index tells the story in my quest for a forecast. The dates above only indicate high probability changes in trend to swing trade from. The chart patterns aligned with the Swing Trading Forecast Model make the decisions easier. There’s a good chance that the rest of September is going to be good to be long till September 24th. There’s high probability we see a market correction till November 19th / December 17th. Once the new year starts we should see the markets go up till February 18th 2013 down to the end of March, up to the week of May 13th. The Dow Jones Industrial Average, 100 year chart indicates the high probability of the DOW bottoming around 2017 at around 5000 (as long as the price stays in the channel). If that is the low, then that means gold would have to be priced at $5000.00 if the DOW to Gold ration holds true.
For now The chart of the Shanghai Composite Index tells the story and the HUI Index is still the best buy in town.
Notice the chart above, The triangle is showing 5 waves in an ABC corrective wave. Looks like the world is going to get some time (9 months or so) to prepare for the inevitable. It’s worth noting that the Shanghai Composite Index leads by about 4 – 6 months.
I’ve mentioned it before in other post’s, but I’am still long term bearish. Till 2015 -18 or so, whenever the market indicates to invest in all equities. Whenever that’s going to be, it’s going to be scary and gut wrenching for sure. It always is buying at the bottom.
The chart above shows you a quarterly chart of the Dow Jones Industrial Average Quarterly chart. Notice the stochastics are in the overbought area. The western markets could stay in the overbought area for some time before turning around. I wouldn’t rule out a correction before October, 2012. I will give you the pivot point / trend change dates at the end of the post.
The 100 year chart of the the Dow Jones Industrial Average is not necessarily a forecast but a possible outcome if the price of the DOW stays within the channel. An 11 year consolidation does fit well with a 33 year bull market from December 1974 to October 2007.
We certainly do live in interesting times, however, what’s going on now really isn’t any different than what was going on 100 years ago when Jesse Livermore was trading. They say a picture is worth a thousand words, and believe me, I did a lot analysing this weekend. Take a long look at the chart above. There’s tonnes of information in there. I’am thinking outside the box on this one, like I’ve said in other posts, the market is a wondrous beast, It’s the greatest puzzle in the world. The chart above is all about probabilities.
The chart above is the same chart as the Dow Jones Industrial Average 100 year chart, zoomed into a weekly chart. We are looking at an ascending wedge formation which in the grand scheme of things is bearish, however, I’ve seen these patterns broken too. The market could go to the orange line above and peak at about the same time as the Shanghai Composite Index, but when thinking about where capital is going to go, that’s China. So it’s possible to see capital leave the western world and go to China.
The best deal in town is still the gold stocks. I hope all of you got into something back in May when the Swing Trading Forecast Model indicated a low. It’s quite possible this sector is going to move into the latter part of February, 2013.
The chart above is the weekly chart of the HUI Index. Expect a pull back or consolidation short term but this sector should perform well in the medium term.
The above chart of the S & P 500 is showing overhead resistance. Expect a pull back in the short term. The western markets could lead investors off of a cliff short term.
Look at this chart of Light Sweet Crude Oil. It’s said that in a business cycle, commodities is the last sector to peak.
The GLD SPDR Gold Trust popped through some major resistance last week. Now the only thing is which target do we aim for, is it possible we could be in for a double top? the charts in the months to come will tell us what to do.
x It looks like the head and shoulders pattern is going to fail for the global index’s, but there’s no conformation one way or the other yet. Looking at all of the other chart, there is high probability that this pattern is going to fail.
The Market Vectors Gold Miners ETF is showing overhead resistance. Expect a pull back in the short term.