Long Term Forecast – Major Indices

Today’s closure in all major indices encouraged me to zoom out all charts and look at all fibs from the very long term perspective. In other words, the weekly candles made some very alarming reversal combos that might signal a major turn for Mr. Market, possibly followed by a multi-week or even a multi-month decline. Though I treat this signal as a first harbinger. The real one would come with the end of November, once the closing prints are made for all candles.
I charted the waves for all major indices and found that, surprisingly, all indices are at certain fib levels that could be the turning points for the waves. For example:
DJI – 3.0 fibs off 2009 low
NDX – 6.0 fibs off 2002 low and 6.0 fibs off 2009 low
RUT – 2.764 fibs off 2002 low, and
ES – 3.618 fibs off 2009 low.

Let me explain my line of thought on the DJI charts as it seems the most academic:
Assume that I don’t exactly know what number of wave has completed. I know for sure it was a motive wave, so it could be either wave III, or wave I, or wave V of (1). If it was wave III, then I should expect a wave IV to find the support at the level of wave 4 of a smaller degree. If it was wave I, than it would be reasonable to anticipate a retrace of 0.382-0.786. If it was wave V of (1), perhaps I need a bigger monitor (low probability at this point).
The very long term channel looks the best on the NDX chart, pointing that wave IV could take 2-2.5 years to complete. ES and RUT seem to be aligned.

Honestly, I need some time to get accustomed to what candles are telling me and to what I have charted. There is always a chance of continued trend upwards, but I think it is very slim at this point. 

%d bloggers like this: