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LOOK REPORT #3
HSI INDEX PREDICTIONS, June 3, 2005 Background: The primary seven weekly cycles in this Index are at 20, 28, 36, 52, 65, 190 and 427-weeks. These cycles represent an approximate (within 25%) fit to the amplitude/phasing of the long term weekly Hang Seng Index from 1987 thru April 2005. The sum of the seven cycles versus (detrended) actual weekly closing HSI from 1987 to April 2005 are shown in Chart 1. The HIS Index is in a downtrend with bottom possible in July/August 2005. In particular, FY 2006 looks deflationary in terms of commodities and equities beyond April 2006. The long-term dominant cycles in the Hang Seng Weekly Index Closing (detrended) predicted from July 2005 thru 2006 are shown in Chart 2. It shows these cycles will make a minor bottom around Sept/Oct 2005 with a possible uptrend into May 2006. Watch out after top in April/May 2006 forms because the predicted drop may be sharp and it comes in the same timeframe a possible worldwide recession/declining commodity prices could be happening. Chart 3 shows the predicted largest weekly cycle (190-weeks) in the HSI which should bottom in April/May 2006. There is no longterm (bull market) in the HSI until this cycle bottoms. This cycle may lead a rally in the HSI to a top in Sept 2007. Chart 4 shows the predicted waveform in the HSI from 2005 thru 2011. There is no longterm (bull market) rally in the HSI predicted after Sept 2007 thru April 2010 (part of a major secular bear trend that will hit worldwide after June 2006). The HIS will become an interesting opportunity after its major bottom in mid-2010. Bottom
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LOOK REPORT #4 S & P 500 INDEX, June 24, 2005
Background:
The primary seven weekly cycles in this Index are at 18, 40, 52, 76, 105, 233 and 354-weeks. These cycles represent an approximate (within 15%) fit to the amplitude/phasing of the long term weekly S&P 500 Index from 1950 thru May 2005. The sum of the seven cycles versus actual weekly closing of the S&P 500 Weekly Index from 2000 thru 2002 are shown in Chart 1. The S&P 500 Index weekly closings versus sum of seven largest cycles is shown in Chart 2. We had predicted an extended top forming in the S&P 500 Index beginning in Dec 2004 (see Magnificient Seven Series in FSU Archives). There is a shift in the largest cycle from 331 weeks to 354 weeks and an increase in amplitude. From numerous Neural Net simulations this corresponds directly to an significantly increasing trend in M3 through money-pumping in the 266-week and 69-week cycles in M3. (Translation: The Fed is trying to keep this market afloat thru Oct/Dec 2005 by any means possible). The situation is similar to June 1987 in terms of cycle tops and the Fed’s (or Bank of Japan) actions regarding money supply. This action by the Fed only extends the largest cycle period and makes the amplitude much worse as regards the coming downside. (Translation: watch out after May/June 2006!). Chart 3 shows the predicted largest weekly cycle 354-weeks) in theS&P 500 Weekly Index which should form its top in May/June 2006 and the comes the Secular Bear. There is no longterm bull market in the S&P 500 Weekly Index again until this cycle bottoms in Jan 2010! However the smaller 233-week cycle will bottom in Sept 2009 to lead off the coming Mega Rally of 2010-2013 with a huge double bottom from Sept 2009 thru Feb 2010. Chart 4 shows the predicted (detrended) waveform in the from June 2005 thru 2012. There is a small upside potential perhaps left in this market in the next few months but I would avoid trying to play it. This is a dangerous market and will become increasingly worse after June 2006. The current topping (sideways movement) is very characteristic of these weekly longwaves forming a huge top. Bottom
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