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Old 07-29-2014, 04:09 AM   #1
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The Dow is looking very top heavy.

Look at this chart:



Notice how the Dow is barely HUGGING the uptrend line and apparently having a hard time staying above the line. That, to me, is a SURE sign of an impending CRASH.

There does not seem to be any strength whatsoever.

What do I expect? I expect the Dow to continue creeping up UNTIL Labor Day, then CRASH.

On Labor Day weekend, I will post some hard and fast numbers detailing exactly where I think this is going leading up to the elections. I can't post the numbers now because those numbers are totally dependent on where the Dow will be in about 4 weeks.

Original chart and commentary here.
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Old 07-29-2014, 09:25 AM   #2
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So tomorrow will be the big day sometime soon then. I guess I'm as ready as I'll ever be given my circumstances.
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Old 07-29-2014, 09:36 AM   #3
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Originally Posted by PMBug View Post:
So tomorrow will be the big day sometime soon then. I guess I'm as ready as I'll ever be given my circumstances.
Based on history, my best guess is that the Dow will top out on or near the last day before Labor Day, possibly as early as Monday, the 25th of August.

If gold follows the same scenario as in 2008, it will also top out on its current minor uptrend around the same time.

Added:

In my opinion, the only way to avoid a crash is for the Dow to significantly break above the red line and stay above the blue line between now and Labor Day. My assessment? IMPOSSIBLE!
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Old 07-29-2014, 11:47 AM   #4
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The market is definitely toppy.

Take a look at the Russel 2000 (IWM is the ETF). It's leading lower.
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Old 07-29-2014, 12:18 PM   #5
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The first butterfly to flap its wings could cause this to become a landslide, so I would be watchful if I had any paper right now. With zero volume at the DOW, I don't see how they can hold this up for very long. Although, the Brotherhood of Darkness can and does do a lot of things I once thought unthinkable.
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Old 08-30-2014, 06:11 PM   #6
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Ok, everyone. Labor Day weekend is now here. And here is the promissed prognosis of the Dow.

If you have been watching the Dow, you are aware that it has been creeping up pretty much ever since I originally started this thread. And, as stated earlier, it has done exactly as expected topping out just a few days ago. Will it continue up in September? Or drop through the floor?

Well, take a look at this recent chart (29August2014):







Note how the volume has declined for the last three years! Soon, if that keeps up, volume will be ZERO! What does that tell me? THERE ARE FEW IF ANY BUYERS LEFT! Everyone is out of money! That means, to me, that the SELLERS are now in control! Based on ONLY on this, I would bet on the market falling through the floor in September.

To lend further credence to this belief is that historically, in every instance that I know of, whenever the Dow makes new highs in the last week of August, there is always some sort of a severe correction in the following two months.

So, what do I expect? I see three possible scenarios referencing the chart at the beginning of this thread.

1) Dow will drop 10% or so, then continue to creep up UNDER the BLUE and RED lines for either 2 or 5 more years before the mother of all crashes ensues.

2) Dow will bottom out near the GREEN line on the chart then bounce to make new highs for at least 2 more years, also under both the BLUE and RED lines. When will it bottom? Probably near the end of October this year. That would be about a 20% drop from current prices.

3) Dow will bottom out near the ORANGE line on the chart. When? Monday, 20 October 2014, or about a 40% drop. Then bounce back to current highs sometime in the next 2 years, and if no crash in 2016, then to new astronomical highs leading in to the crash of 2019.

Why am I so unsure? Because the NEXT MAJOR crash is due EITHER Friday, 28 October 2016 OR Friday, 25 October 2019 NOT in 2014! 2014 is really too early for the next major crash, so I lean towards either scenario #1 or scenario #2 above. Right now a 40% dump this year looks extremely unlikely, though possible.

No matter what happens, a drop will likely happen between now and the elections. The more severe the drop, the worse the Democrats will fare in the elections, just like the 2008 drop ensured that the Democrats would win with a landslide. In 2008, the Republicans were forced to OWN the bad economic news. The same could happen to the Democrats today.
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Old 09-02-2014, 06:57 AM   #7
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Sounds like an old fashioned stock market ticker would be a good Halloween costume for the next few years.
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Old 09-02-2014, 08:28 AM   #8
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This prognosis assumes that there is a 'market' ?

If those in control have always 'managed' the market then we are predicting their moves.
Still interesting and possibly useful but my hunch is that they are genuinely frightened of allowing a 'correction' to occur in current circumstances.

The real call might be just how much control they really have.
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Old 09-02-2014, 12:11 PM   #9
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Originally Posted by rblong2us View Post:
This prognosis assumes that there is a 'market' ?
Yup, so true. But if there is no market we are TOAST.

Originally Posted by rblong2us View Post:
The real call might be just how much control they really have.
Also true, and we will see how much control they really do have. If 2008, 1997, 1987, 1929, et alia are any indication, they won't have a lot of control at all. A few bad earnings reports could send the Dow in the tank super fast.

All that I DO know for sure is that the market CANNOT keep going up forever on NO volume. Now is as good a time as any for a severe correction and historically this is the weak time of the year for markets in general.
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Old 09-02-2014, 06:05 PM   #10
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bad earnings reports are forbidden henceforth ...........
volume will be increased ..........
history rewritten ...........
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Old 09-02-2014, 11:22 PM   #11
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...

September is traditionally the worst month for stocks.

Today the Dow was down 30 (modest), but the next few weeks will be fun to watch.

In 2007, I believe it was August when the two Bear-Stearns hedge funds failed, that is often considered to be the "first domino" to fall for the observant. September 2008 was when stocks started their epic swan dive, yes, October was the worst, but September 2008 was also very bad.

Maybe they should change the old saying: "SEPTEMBER is the cruelest month."
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Old 03-25-2017, 03:12 PM   #12
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I figured that it is time to re-examine exactly what has happened since I originally started this thread. First a new chart:



This is basically the same image as the first one, just almost three years later.

Note what happened. Almost exactly as scenario #1 in my August 30, 2014 post. And, as I have posted elsewhere, the stock market would have roared higher NO MATTER WHO WAS ELECTED PRESIDENT. Markets hate uncertainty, so once the uncertainty of the election was past, the Dow came to life big time to get back on track following the RED line.

So, what do I think will happen now? Pretty much exactly as I stated previously. How high will the Dow go? I expect it to top out somewhere between 23000 & 24000 in August 2019 but STILL UNDER THE RED LINE. Those numbers are basically a guess since I have no way to extrapolate real numbers.

NOTE: Regardless of the real numbers, the Dow will not go above the RED line and the crash will be about 40% even if the GREEN line is NOT reached. That may also mean that since my following comments are based on the "ideal" numbers that those comments may also be way off.

Next, starting around Labor Day 2019, a 40% drop bottoming out about 56 days later on Friday, 25 October 2019, the same day I have been hammering on for the last eight plus years. So, where will that bottom be? AT THE GREEN LINE!

Next, we should see the Dow bounce back to the BROWN line with the Dow bouncing between the GREEN line and BROWN line for months before finally crashing down to the ORANGE line. Pretty much the same scenario that happened in 1929 through 1934, but with bigger numbers.

Where from the ORANGE line? It is anyone's GUESS as there is not enough recent history to go by. If we assume the same scenario as 1929, look for at least a decade of sideways movement before again breaking to the upside. That would mean sometime in the 2040's before the Dow would rise back above the GREEN line.

Personally, I don't think that will happen and I won't be alive to know one way or the other, which is my OPINION which is NOT based on FACTS.

How will this affect the Presidential election in 2020? Hard to tell. We know that the Republicans will be forced to own the crash since it happens on their watch. However, the crash would have happened NO MATTER WHICH PARTY WAS AT THE HELM. How the Republicans handle the crash will mostly determine whether they stay in power or not. The only way that I can see them remaining in power is if they let the market do its thing WITHOUT government interference. I don't think that is politically possible, so I fully expect the Democrats to return to power in 2021 as a result.
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Old 03-27-2017, 01:24 PM   #13
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Originally Posted by mmerlinn View Post:
Ok, everyone. Labor Day weekend is now here. And here is the promissed prognosis of the Dow.

If you have been watching the Dow, you are aware that it has been creeping up pretty much ever since I originally started this thread. And, as stated earlier, it has done exactly as expected topping out just a few days ago. Will it continue up in September? Or drop through the floor?

Well, take a look at this recent chart (29August2014):







Note how the volume has declined for the last three years! Soon, if that keeps up, volume will be ZERO! What does that tell me? THERE ARE FEW IF ANY BUYERS LEFT! Everyone is out of money! That means, to me, that the SELLERS are now in control! Based on ONLY on this, I would bet on the market falling through the floor in September.

To lend further credence to this belief is that historically, in every instance that I know of, whenever the Dow makes new highs in the last week of August, there is always some sort of a severe correction in the following two months.

So, what do I expect? I see three possible scenarios referencing the chart at the beginning of this thread.

1) Dow will drop 10% or so, then continue to creep up UNDER the BLUE and RED lines for either 2 or 5 more years before the mother of all crashes ensues.

2) Dow will bottom out near the GREEN line on the chart then bounce to make new highs for at least 2 more years, also under both the BLUE and RED lines. When will it bottom? Probably near the end of October this year. That would be about a 20% drop from current prices.

3) Dow will bottom out near the ORANGE line on the chart. When? Monday, 20 October 2014, or about a 40% drop. Then bounce back to current highs sometime in the next 2 years, and if no crash in 2016, then to new astronomical highs leading in to the crash of 2019.

Why am I so unsure? Because the NEXT MAJOR crash is due EITHER Friday, 28 October 2016 OR Friday, 25 October 2019 NOT in 2014! 2014 is really too early for the next major crash, so I lean towards either scenario #1 or scenario #2 above. Right now a 40% dump this year looks extremely unlikely, though possible.

No matter what happens, a drop will likely happen between now and the elections. The more severe the drop, the worse the Democrats will fare in the elections, just like the 2008 drop ensured that the Democrats would win with a landslide. In 2008, the Republicans were forced to OWN the bad economic news. The same could happen to the Democrats today.
Has there been a drop that fitted one of your scenarios mmerlinn ?
You're brave to commit to such specific dates and % drops
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Old 03-27-2017, 09:26 PM   #14
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Originally Posted by rblong2us View Post:
Has there been a drop that fitted one of your scenarios mmerlinn ?
You're brave to commit to such specific dates and % drops
1929, 1987, 1997, & 2008 all had 40% drops (measured from starting high to ending low 56 days later) during the same time of the year. There are undoubtedly others, but I have not spent the time researching them. If I were to guess, I would look at 1938, 1948, 1959, 1967, & 1978 as being the most likely other years since 1929.

I predicted 1997 about 6 months in advance and it happened like clockwork both to the day and to the percentage drop.

I predicted 2008 three & a half years in advance, and it happened like clockwork both to the day and to the percentage drop.

This time I started predicting the 2019 crash 11 years in advance, and I expect it to go like clockwork again both to the day and to the percentage drop.

BTW, the next 40% crash bottom is due on Wednesday, 27 October 2027, which is over 10 years down the road.

I know of no 40% drops in a 56 day time span (8 weeks) at any other time of the year. 5%, 10%, and even 20% drops seem to happen at any time, but not 40% for some reason.

I was so confident of my 2008 prediction that I made plans over 3 years in advance to be in Austin, Texas when the bottom hit. I was there when the 1987 bottom hit, and the day before 2008 bottom was due, I drove to Austin from Oklahoma City where I had been vacationing for the previous 2 weeks. I live about 2300 miles from Austin, so this was not a spur of the moment trip - I had to save for 3 years to afford the trip. I would like to be in Austin again when the 2019 bottom is due (26 October), but finances look terrible, so it won't happen.
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Old 03-28-2017, 07:29 AM   #15
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October surprise before the next POTUS election? You think Trump is going to piss off the Federal Reserve that much, eh?
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Old 04-01-2017, 01:56 AM   #16
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Originally Posted by PMBug View Post:
October surprise before the next POTUS election? You think Trump is going to piss off the Federal Reserve that much, eh?
LOL. Who really knows? All I know is the numbers and the numbers say that it would happen NO MATTER WHO IS IN OFFICE. In this case it is Trump's baby, however, if Clinton had won it would be her baby.

We have about 2-1/2 years before the target date, so it is going to be interesting to watch what Trump does both in helping it to happen and in trying to prevent it from happening. If he handles it properly, he will be re-elected, if he does not, he will be another Hoover. Politics lean toward a Hoover outcome.
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