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THE
MAGNIFICENT SEVEN Background:
The Old Bull Market Rumor Charts 1 - 3 show the updated Magnificent Longwave (Weekly) Cycles riding thru the S&P 500 Index today and far into the future. The filter sum of various weekly cycles is also shown in Chart 4. Chart 1 shows the updated and predicted longwave weekly cycles for the S&P 500 Index thru 2007. It shows several of the major cycles have already peaked (233,331-weekly cycles, also called four-year and six-year cycles). However, the major cycles that are now peaking will be followed next year by the big dog (449-week cycle) peaking and taking down the S&P 500 Index thru mid -2007. At this time next year, all will know that the “aging bull market rally” is really over and that the secular bear is alive and is feeding on the S&P 500 Index. This chart also suggests some type of “political or financial” crisis or event occurring in April/May 2005 or Oct 2005 which may trigger a sharp sell-off. Chart 2 shows the dominant 233-week cycle accelerating downward (crossing the x-axis, point of maximum downward acceleration in Oct 2005) off a market bottom in July 2005 (doomed to failure summer rally) as the major longwave weekly cycles are headed down. The S&P 500 Index may have already made its high on the year (US Dollar weighted) but there will be another attempted summer rally. Chart 3 shows the initial bottom forming in Feb 2007 following a possible major bear rally beginning in mid- 2007 thru Jan 2008. However, after a major S&P 500 Index top forms in early 2008, the S&P 500 Index is predicted to suffer a dangerous decline again (5th wave down?) into 2010. Overall 2005 is going to be an exciting year for bear watchers (roller coaster going mostly down after September 2005) – and for all you secular bear watchers, we have scheduled the next regular feeding for Oct 2005. Also, the badgers and prairie dogs are continuing to get soaked from ongoing flood of erroneous financial information worldwide as they watch for the coming Financial Storm. What you gonna do when the Badger comes after you - retire? After the Badger comes the Grizzly, and after the Grizzly comes the...... The Last Stagecoach out of US (Sept 2012?): Chart 4 shows the predicted S&P 500 Weekly Index (detrended) predicted from 2005 thru 2015. The secular bear feeding is about to continue in earnest as the bear is coming back from its 2000 nap. The next two years are going to be rough and be prepared to stay away from this bear for the next five years (July 2010) except for bear rally in mid-2007. After that, we may have the largest rally in the history of the NYSE coming from mid-2010 thru 2012 (huge topping formation thru 2014)? If this cycle continues along its current trajectory, the 401 (k) and savings of the Baby Boomers will pour into the worldwide market from 2009-2013 (eventually along with privatized Social Security account money – watch and see a huge double top form in 2012-2013 caused by this set-up). It has all the earmarks of becoming the greatest S&P 500 Index market rally of all time (make plans early to be there - it is going to be wild!). After these large cycles again turn downward 2013-2016, they will bring down the NYSE, S&P 500 Index, Nikkei, HIS, CAC40, MIBTEL, SSMI, FTSE, all points South. The period from (2013-2017) could become a six-sigma event which may wipe-out 70%+ of the S&P 500 Index gains from its top in 2012. These events will eventually lead to the US Dollar ceasing to be a worldwide currency and it suggests global resource “wars” will start to drastically change the financial landscape unless Mother Nature or “dominoes” derivatives trading decides to do it first. My what large teeth you have for a Badger – funny I thought Badgers were much smaller creatures!? Please do not feed the Secular Bear! Large Weekly “ Cycle”: Chart 5 presents a speculation of the largest weekly cycle in the S&P 500 Index (the 1800-week cycle or 36-Year Cycle. I did not find anything larger but this dataset does not go far enough back to resolve this issue for S&P 500 Index. This is possibly one of the rare sightings of such a creature (if it truly exists). The cycle amplitude has been growing since 1950 (actually since 1900s in DJIA). The cycle is now starting to accelerate downwards and will bottom in 2018 (?) and the same cycle is in the NYSE Composite Index. It was not included in the predictions but if it exists, it could be a party-killer in 2012. The bottom of such cycles maybe associated with wars and depressions (2020-2021?) – called K Waves.
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, the author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.
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