It’s time to revisit the oil plunge

Oil plunge

It’s been a while since our last post and we are pleased to note that our prediction for an oil plunge actually took place as we expected, with WTI crude now towards our target as predicted in Sept 2013. The dance to oil on a slippery ground The wave count predicts even lower oil prices…

Superstars of the 2009 – 2014 bull market

Superstar

Consumer Borgwarner – BWA: Autoparts: Fuel economy standards and improved emission drives growth. P/E (12/14E) – 17.7x Footlocker – FL: Athletic Apparel: Fitness theme. P/E (12/14E) – 15.0x Fossil – FOSL: Watches & Lifestyle. Collection of different brands eg. A/X, Diesel, DKNY, Adidas. 44% of US Market. Growth of Fossil outstrips that of industry. P/E…

Global Financials

World's tallest buildings

Here are some wave patterns of the Global Banks. Most seem to follow the pattern of the global financial ETF IXG and Banking Index BKX. For some banks 2007 marked a Supercycle Wave V Top. For other banks it marked a Grandsupercycle Wave (V) Top, and the ensuring correction was more severe. General it was…

Utilities

Pylons

The Utility sector hit a Wave V Supercycle peak in 2008. 2014 is a Cycle B Wave that has topped. Cycle C Wave is to come. The Utilities weighting in the S&P500 at 2013 year-end is 2.9%. The Utility stocks themselves are quite mixed. There are many stocks that follow the pattern of the index…

Consumer Services

WalMart & Mcds

The Consumer Services Sector is reaching a Supercycle Wave V top in 2014. The Consumer Services weighting in the S&P500 at 2013 year-end is 12.5%. Many individual Consumer Services stocks are also hitting their Supercycle Wave V high in 2014. WMT ($257bn), AMZN ($140bn), DIS ($139bn), CMCSA ($134bn), MCD ($100bn), SBUX ($54bn), YUM($34bn)   For…

Technology

Microchip

The Technology sector is a fascinating one because it is so dynamic. The 2000 bull market top is the orthodox high of the sector and has not yet been eclipsed. However 2014 marks the high of many technology stocks – many of which were not yet established in 2000 and did not participate in the…

Industrials

CAT 336E LH

For the Industrials 2014 marks a Supercycle Wave V Top. The Industrials weighting in the S&P500 at 2013 year-end is 10.9%. Most industrial stocks exhibit patterns in line with that of the sector IYJ. UTX ($107bn), BA ($93bn), MMM ($90bn), HON ($72bn), CAT ($65bn), LMT ($52bn) One of the notable exceptions is GE ($268bn) that…

Healthcare

Pills

The Healthcare sector has been one of the strongest sectors to date, and one of the last to top out. 2014 represents a Supercycle Wave V top. The Healthcare weighting in the S&P500 at 2013 year-end is 13.0%. As you can see some of the stocks below have exhibited tremendous price appreciation in the past…

Financials

Wall Street

Looking at the severity of the selloff in the financial crisis of 2008, it is possible that the financial sector – represented here by IYG and BKX hit a Grandsupercycle (V) Top in 2007. Since then we have traced out (A) wave down with wave (C) to come. The real estate sector IYR also topped…

Energy

Oil_and_gas

The Energy Sector IYE reached a Supercycle Wave V high in 2008. 2014 represents a Wave B up of Cycle degree which should give rise to a Wave C down which has just started. The Oil&Gas Exploration and Production Index IEO also shows a similar pattern. The Energy weighting in the S&P500 at 2013 year-end…

Consumer Goods

friends shopping

US Consumer stocks have reached a Supercycle V top in 2014. Cycle wave A down is to come. The Consumer Goods weighting in the S&P500 at 2013 year-end is 9.8%. The patterns of the individual stocks within the IYK sector is a bit mixed. For some stocks 2014 is the Wave V Supercycle top whereas…

Basic Materials

Copper mine

The Basic Material stocks have completed a Supercycle Top V, and Cycle Wave B up from 2009 – 2014 has just completed. The Gold/Sector XAU ($181bn) peaked later in 2011 but since then has also come off dramatically. Cycle Wave C down is to come for both indices. The Basic Materials weighting in the S&P500…

Sectors in which 2014 is a B wave top

Hanging off cliff edge

After a long climb to the top from 2009 the sectors in which 2014 is a B Wave or D wave top are Energy (IYE), Materials (IYM), Financials (IYG), Utilities (DJU) and Technology (Nasdaq Comp). Together these sectors make up approximately 53% of the weighting in the S&P500. So as you can see 2014 is…

Sun setting on emerging market bonds

Sunset i

Once seen as the hero of the investment community, emerging market bonds have completed 5 waves up from the Oct 2008 low, which is in turn a 5th Wave of a larger degree. This 5th wave up was fueled by the Federal Reserve cutting interest rates to zero, which in turn gave rise to a…

  • Apr 27, 2014
  • Asia, EMB
  • Comments Off on Sun setting on emerging market bonds

Patiently waiting for the top

Patiently waiting for the top

It has taken another 6 months for the Dow to continue its rise, which is far longer than we have anticipated. However, the long term pattern still holds and the updated Supercycle top wave count is below. It is our current view that we are currently tracing out wave D of a Supercycle Degree triangle….

  • Apr 24, 2014
  • INDU, US
  • Comments Off on Patiently waiting for the top

One Final Push

Rocket

Following the Fed’s decision to carry on monetary stimulus the S&P 500 shot up to a new record high. This looks to be the final push up of the entire bull market rise from 1900-present. We can count 5 waves up of multiple degrees – down from Grand Supercycle degree all the way to Minuette…

  • Sep 19, 2013
  • SPX
  • Comments Off on One Final Push

Could the Dow Industrials be hitting a Grand Supercycle Top?

Spinning Top i

It is possible that the Dow Industrials is currently hitting a Grand Supercycle Top. As you can see based on a historic stock market chart from 1900 – 2013 below, Aug 2013 marks the high of a series of tops of different degrees – all the way up to a Grand Super Cycle Top. Our Wave Count…

  • Sep 8, 2013
  • Asia, Europe, INDU
  • Comments Off on Could the Dow Industrials be hitting a Grand Supercycle Top?

The dance to oil on a slippery ground

crude_oil dance

Since hitting a supercycle degree top of $147 a barrel in July 2008, WTI Crude experienced a dramatic crash down to $32 a barrel by Dec 2008. the past 4 yrs have seen a wave B rally to $110 which is currently topping. Once it tops wave C will begin and it will take prices back…

US Treasuries point to deflationary times ahead

Hot air balloon deflating

If we take a look at the long term US 10-yr Treasury Chart we can see that ever since the rampant inflationary period of the early 1980s the 10-yr yields have been in a downward trend. Since hitting an all-time low of 1.4% in Aug 2012, yields have more than doubled, touching its long-term trendline…

Dow about to take a dive

Helicopter Dive

The entire formation from Mar 2009 to Aug 2013 has the right look of a idealized Elliott Wave major double zigzag correction. Here is the textbook version of what this type of correction should look like. After a major correction such as this is completed we should expect the downwards trend to continue. Now look…

Bursting of Internet Bubble 2.0

Internet bubble

The Nasdaq has just traced out an enormous 10 year corrective wave following the 2000-2003 first dot com bust. We are surely going to see another another dot com bust 2.0 and with Tech stocks such as Apple, Google, Facebook, Tencent, Linkedin etc all at  extremely stretched valuations the chances that we will do so…

The Coming Stock Market Crash

Trading floor after crash

There is an uncanny resemblance to the stock market today and in 1973, where the market proceeded to drop around 50% over the next 18 months. In the chart below we can see that both the Dow and the S&P 500 could be tracing out an A-B-C-D-E correction in the shape of an expanding triangle….

The Small Caps

Small cap baby

In Apr 2014 the Russell 2000 finished hit it’s Supercycle Wave V Top. In terms of composition the Russell 2000 has a total market cap of around $2tr and consists mainly of small cap stocks, so is a lot more volatile than the Dow Industrials and S&P500. The largest market cap of a company in…

Nasdaq’s rise has finally come to a halt

Nasdaq Trading Halt

The Nasdaq has been the last of the Major Indices to top. The Nasdaq reached its all time peak in Mar 2000, which was a Cycle Wave Top. Oct 2013 marks the b wave retracement of the Cycle Wave Top and is of Primary degree. Mar 2009 to Oct 2013 is a c wave of…

  • Apr 27, 2013
  • Nasdaq
  • Comments Off on Nasdaq’s rise has finally come to a halt