Last month as I went through some of the cycle studies I have been doing, something occurred to me to take counts of weekly bars which is one of Gann's favourite time frames. So I counted the trading bars from 2007 high to 2009 low and I got a total of 74 weeks. I then took 3.1415 which is the value for Pi. Don't ask me why, but some cycle analyst probably know why I took this number and I multiplied it with the number of weeks. The value I got was 232.47 weeks. Adding it to the lows of 2009, I got a approximate date of Sept 2 - 6, 2013.
I didn't know what kind of value this analysis brings, so I put it on the side for more consideration later on. Then, a few days ago I stumbled upon a video by Bloomberg which interviewed Tom McClellan, renowned for his McClellan Oscillator and his Technical Knowledge. You can find some of this work HERE. In the video he talks about using the commitment of trader results (COT) mainly the Commercial activity to forecast 1 year in advance the formation or direction the US Index will be heading. Shifting the values of the COT 1 year to reflect the tops and bottom of the market. Although the values of the market cannot be given, we can at least figure out when a topping process and bottoming process comes in. VIDEO HERE. Note.. This video was taken on March 2012, and accurately called the June 4th bottom in 2012 4months in advance of the video. The chart being shown by Bloomberg is in more detail shown below.
As you can see the Phase shift of a previous data 1 year ahead shows how accurately the EURODOLLAR has called the markets top and bottom. So what does this tell us going forward and what does this have to do with my date of Sept 2-6, 2013? Well, if we take the values of the two COT charts below, you can see a bottom coming in on the month of Sept 2012 (actual value). Then rallying to about the range of Nov 2012 (actual value). This if pushed forward should show us a bottom and top near the Sept 2013 and Nov 2013 respectively....
The chart above starts at June 9 2012, but we can assume that the price high (Commercial traders in Maroon) prior if shifted 1yr forward would be within the May 22 high currently in place.
If you believe in this technical results then expect a low near Sept 2013. I received a confirmation of this from an email Tom McClelland sent me below.
" That model is forecasting the slide we are in now, having correctly identified the timing of the May top. It says the market should slide even lower to a low due in September."
This is also the same sentiments by JAY as a potential low discussed at PLANETFORECAST BLOG. If you would like to know more please read the comments on the link to understand a bit of what cycles are being talked about.
-JAYS CHART HERE. I believe Jay's Cycle low for this year falls within the August and September 2013. Jay if your reading this correct me if I'm wrong but I have a date of Sept 13, 2013.
This would then tie in with my Pi calculation of Sept 2013 as well. Since COT results and Jay is calling for a low at this date I would assume my results would also point to a low. But we will analyze it more when we get there.
A potential target for a Sept low for me is the 200 WKLY ma. sitting right now at 1285 SPX WKLY CHART. This is just a speculation of course.
Hi MP.
ReplyDeleteI also do TD time counts and project those turning points to future dates using the sq of 9. I have noticed that Brent Oil likes the diagonals. Interestingly, the weekly time counts closely correspond with the daily. You can confirm the future dates by squaring dates along with the mathematical relationships between the previous highs and lows (which is exactly what GANN said were "points of reference").
Brent oil is about to collapse BIG time. If prices close lower than $97, it is on.
Lastly, rather than using the McClelland do some back testing on the CCI. It is far better and predictive.
Cheers
Chris
Hi Chris,
ReplyDeleteI do see Oil looking disastrous in the coming weeks. I have been using WTIC. I bought Mikula's square of nine, but I have to say I haven't passed the first few pages. I guess Im getting intimidated. So you are saying that I can use CCI as a pattern to foretell future trends of the Main Indexes?
I am willing to show you how to really use the CCI, but not to the whole world. They foretell any stock or commodity price action. Any ideas?
ReplyDeleteStick with it, it's worth the exercise. Do you have his software? You might also want to read Carl Futia's Special Reports, they are very good.
I use a very simple technique in my trend analysis and it has been great. I tend to react than to trade the future in trying to forecast. We both know only a handful can do it and do it well. But my technique is simple, and I will share it with you also when you reply.
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