I've been keeping this one pretty close to the vest for most of the year. It's a series of cycles worked out on a daily chart of the Dow Jones Industrial using a very simple technique I came up with a few years ago. Each colored vertical line is a cycle. They've been pretty spot on and to the bar.
The yellow wavy line forecast hasn't turned much but when it does, it too, has been spot on. That forecast is topping out and there's a vertical line coming up. A major turn or a minor one? Only time (and price) will tell.
My hockey and hedge fund manager buddy is always laughing at me giving me a hard time and asking me what the market's going to do. 2 weeks ago I told him the Dow was going long. He laughed. He also laughed when it panned out. I don't know if there's anything I can do not to make him laugh. Maybe hit him in the leg with a puck again with my wrist shot. :) This post is partly dedicated to him because I declined going out for drinks one night because I said I was polishing my crystal ball. He said I should bring it along because it works. So here it is.. my crystal ball on the Dow.
Anywho, as the saying goes.. it's not about predicting the future. It's about waiting for the future to arrive and trading accordingly. Which will be the subject for the next series of posts and possibly a video. Making forecasts is all fine and dandy but it's actual trading that makes money. It's possible to get the forecast right and still lose money. I've done that more times than I care to admit to. Suffice it to say, I've also learned some valuable lessons, techniques, and caveats.
One of the frustrating things about most market timing and cycle forecast literature is that there is rarely if any information on how to actually trade a forecast. In fact, one author of a pricey series of books went as far as to say in his message group that if you don't know how to trade a pull-back or a reversal pattern then you don't deserve to have the books or be in trading. So since one of the common questions I get is how to actually trade this kind of stuff, I'll show how I do it. Which is probably not the best way and surely not the only way.
(image is a thumbnail. click to expand)
