Saturday, 31 May 2014

Reflections on moon madness

The sp'500 is now 849pts higher since the Oct'2011 low, that makes for a gain of 79% across just 32 months. It still seems fair to assume that at some point this year, the monthly cycles are going to break lower (if only for a few months), but from there...further 'moon madness' upside.

32 months..and counting

*for those curious..the original post, from last October


sp'monthly'3e (unedited from Oct'2013)

*The ECM cycle (from Armstrong) is highlighted in late 2015.

Now, I'd certainly not get fixated about a particular day..or even month. I'm seeking a 'grand multi year peak' sometime in late 2015/early 2016 time frame.

In the last ECM cycle, the equity market peaked six months after the ECM maybe we are looking at spring 2016 before the current paper bubble catches fire?

Regardless, the point about the above scenario, is that with the break above the 2000/2007 high last year, I became resigned to much higher levels. The break of the multi year double top was a very significant technical achievement for the market, and yet, I still think many are not taking that aspect at all seriously. 

A natural back test of the old double top - from the 1900/2000s, would seem (at least to me) a very natural wave lower this year.

Outlook for the next year or two?


The included wave count is of course entirely speculative, but regardless of how you want to count it (if at all)..the broader trend remains to the upside.

So, I am still holding to the vain hope of a significant retracement this summer/early Autumn. Yet.. in the bigger picture, I think this market is headed to far higher levels. There are many reasons for this, not least of which is central bank ZIRP policy and the huge amount of money printing.

..and that will suffice for today, the week...and the month.

Goodnight from London
*the weekend update will be on the World monthly indexes