Financial Markets Forecast Update

I commence with my gratitude to The Creator

Markets Continue Their Slide to The Downside Across the Globe:

European Markets were bathing in red for second day after the time cycle had been triggered. European markets were 2%-3% down and more importantly closed near the low of the day. Similarly, US Markets gaped down on the open. Markets tried to recover, but failed to do so and closed in red.

Stock Market Forecast Update

I commence with my gratitude to The Creator.

In my May 13th post, I had stated. " There are many time cycles converging during the time frame of 2nd to 3rd week of May (May 14-21). Thus this juncture of time (especially around the time of May 20-21) will be crucial to watch. Why, because Markets are running on fumes, there is no gas left in the tank. Time Cycles are over due for a serious decline,"

Some laughed at me and some heeded to my alert. 
May 21st was the day, when markets made their highest high and SPX opened at 1,666, made a low at 1,662 and closed at 1,669 a measly one point above my target of 1,668, exactly on my time cycle date.

The next day markets rallied on empty tank of gas and then fell flat on their noses. As one of my readers rightly pointed out, NASDAQ fell real hard.  It had lost 2% from its high of the day. The selling, then, continued across the globe. Nikkei tumbled real bad. After all said and done, Nikkei has fallen 7% thus far (at time of the writing this post, see attached pics) in one day (2% up and then dropped 5.1%). Currencies followed the suit.

One thing to notice that big boys bailed out in a big way, :-).
SPY turn over was 243.6 million shares and after hours another 18.65, that is the largest sell off day in number of shares since November 9, 2012. Similarly Powershare QQQ shares turn over was 59.8 million plus 2.47 million after hours traded while its . SPD Financial XLF turn over was 96. millions with 688,695 shares traded after hours, that was the largest down day since 11/07/2012. Big DJI turn over was 171.85 million shares and that was the largest turn over in months. To give you the perspective normal trading volume on DJI is about 100-125 million shares or trading volume 50-period moving average lies around 128million, and QQQ trading volume 50-period moving average lies around 32 million shares. XLF financial Sector index turn over was the twice of its normal trading volume of about 45 million shares.

Finally, look at the low prices of yesterday low on all indices. How far did price fall to...
Market drops in one day and such drop brings it down to the price level of May 14. 

Is that coincidence? No. 

Please check my forecast dated May 13th. Price/Time Cycle squaring started on May 14. Markets tried to go higher, but it was a fake move and one day drop of the markets brings them down to the price levels of May 14, the start band of time cycle. Market price actions are telling you, even though markets experienced a "lost motion" in prices, but real price was 1,662-1,666 range, rest was just fumes and making retail investors more complacent.

Financial Markets Forecast Update

I commence with my gratitude to The Creator

When The CRASH of the Markets to Begin?

Everybody is anxious to know, if the price target was correct. 

Well there is concept about price, coined by Master Trader W.D. Gann, it is called LOST MOTION.

Let me just quote from his book, "“As there is lost motion in every kind of machinery, so there is lost motion in the stock market due to momentum, which drives a stock slightly above or below a resistance level. The average lost motion is 1 7/8 points.  

When a stock is very active and advances or declines fast on heavy volume, it will often go from 1 to 1 7/8 points above a halfway point or other strong resistance level and not go 3 points. The same rule applies on a decline. It will often pass an important resistance point by 1 7/8 points but not go 3 full points beyond it. ” (W. D. Gann Stock Market Course, chapter 10). 

Now let me give away one of my secrets, on how to calculate the lost motion on any price. Since the markets have evolved greatly over the period of 80 years, since the active days of trading of W. D. Gann, so have the rules of price cycle and time cycles. At that time Dow Jones Industrial Index was trading at 100-200 price range. I, therefore, multiply the price attained by the technical or geometrical/mathematical patterns and then multiply it with 1.875% and up-to 2.236%. For example, the price target of 1,668 multiplied by 1.875% gives you 31.27 points. I, therefore, shall add 31.27 to 1,668, which gives me a price lost motion target of 1,699 to allow "the price move" beyond my price target.

Therefore, I ought to be patient to see, if price moves any price up to 1,697-1,699 and reverses, then the price target generated by mathematical pattern is correct. So next couple of days, are very important, giving 3 days lost motion margin for the time cycle, with the price lost motion allowed a price below 1,699 area.