According to Core Spreads’ Chief Market Strategist Sandy Jadeja, the market may have hit an upside barrier today. Not because Janet Yellen spoke today at Jackson Hole and, once again, said rates hikes were in our future or because stock buybacks appear to be tanking.
No. For Jadeja—being a hard-core market technician—it’s all about “price, pattern, and time.” Specifically, he’s forecasting three key dates or time windows where the market may hit a “barrier to the upside,” he told listeners last month on our podcast.
The first time window starts today, Friday, August 26th, and lasts until August 30th. The other two dates are September 26th and October 20th.
We should confess that predictions of this nature are something that we don’t usually pay much attention to at Financial Sense but, according to Business Insider, Jadeja has made a number of very accurate calls in the past.
[O]n July 31, 2015, before flying to Singapore to speak at a conference of more than 5,000 people, Jadeja warned investors on CNBC that something big would happen on August 18, and to "be prepared to bank profits and stand aside." There was then a flash crash where the Dow Jones Index lost 2,198 points (-12.5%) in just four trading days.
After that successful prediction, Jadeja told CNBC on August 28, 2015, that "there would be a further decline commencing on September 14 or 17, 2015. Then, yet again, the Dow Jones fell 991 points (-5.8%) over eight trading days.
And then on October 1, 2015, and in November, he told CNBC again that, "January 4, 2016 would face a bearish mood and see the markets fall despite the bullish consensus on Wall Street." On that date, US markets and other global indexes fell sharply, where the Dow Jones shaved off 1955 points (-11.2%) over 11 trading days.
Given the above, we decided to ask Jadeja about his past “predictions” and how he uses these for trading. Here’s what he told listeners—first clarifying predictions vs. forecasts:
“There are a lot of people saying that I've made predictions and I’d really like to clear that up and say I never make any predictions—it's actually a forecast; and the reason is, if you put a prediction in somebody's mind they expect that to happen, whereas a forecast from an analyst’s point of view means you can actually be flexible. And so the forecasts that I've made—there have actually been about seven, rather than four—what we look for really is cyclical information where we expect something to happen and then we wait for the market to actually indicate if that scenario is building up and then we use technical analysis to really get into the move…
So really what I'm looking for is what I call time windows and when the market enters that time window we often see fairly sharp reversals but more than anything it tells us that the volatility picks up and that's really key—it's the volatility. And that's how we can use that to either trade options or directional moves on futures."
To hear this full interview with Sandy Jadeja, Chief Market Strategist at Core Spreads, where he also provides his "big picture" outlook on the stock market, including his near-term outlook on gold and oil, please log in and click here.