Sunday, July 19, 2015

2015.07.17 DJIA Cycle Model Chart

2017.07.17 DJIA Cycle Model Chart

For new readers, please note that the previous DJIA cycle model failed, so all the usual caveats apply.  The previous iteration suggested slight upward pressure on the index, which has now resolved. Going forward, the model suggests increasing downward pressure on the index going into Fall, 2015. For this model on a historical basis, the absolute value of the Z-score >3 has been a good predictor of a reversal. A previous iteration of the model is shown below and here on the blog.

2017.06.12 DJIA Cycle Model Chart

1 comment:

Anonymous said...

Hi Paolo,

DJIA looking good thus far for shorts - I'm keeping an open mind as to whether US indices will rebound into new ATHs "at some point" or if this pullback evolves into the "Big One". It certainly has the potential to, although my informal meta-analysis of various techniques is 50:50, so one must be careful as to surprises in both directions.

My long-term bias is actually towards new ATHs, with a dip (potentially a correction or Bear market) around Sept/Oct before new ATHs into 2016. I'm however ready to reverse as market action dictates and am trying to avoid being stubborn in the face of new evidence.

Gold is looking good thus far for new lows (perhaps around $1165) and my dilemma is how to take a controlled-risk long position, just in case this could actually be a sustained leg down. A straight long could get stopped out on spike low volatility, although an option may suffer time decay if low-basing takes place rather than a V-type reversal.

I'm still biding my time on crude oil and from gold's recent action thus far, am anticipating a similar final double-spike low later this year as per your latest projections for XOI as a proxy.

Interesting times ahead,

Mr. Anon