S&P 500 Giving Strongest Indications of BEAR Market

The Behavioral Analysis of Markets SPX Model is signaling a major TOP with the strongest indications in many years that a BEAR market is currently underway.  The first downside target is SPX 2110 (a required retest level per our work).

 

Please keep in mind that the process of triggering a signal as strong as the sell signal currently observed, has spanned many decades.  It is a signal driven by natural long-term forces that create emotional responses within human beings– and not any particular current political events.  These types of events only occur every 80-120 yrs.

 

Adding to my already strong conviction that this forecasts has a high probability of being proven correct, is the recent behavior by financial market professionals–in this case a couple of men that contacted me through Linkedin.  When I am attacked for simply posting the predictive results* of my model, I know we’ve entered a highly emotional phases.   I expect this type of nonsense on Twitter (that’s why I have a private account for serious market participants) but this is a new phenomenon on Linkedin.

 

*This forecast has nothing to do with any opinion.  It is based 100% on the signals derived from my Behavioral Analysis Model.

 

On a positive note, the Natural Gas Model is very bullish and we are buyers of UGAZ in the 10.75–12.25 range with targets at 36 and higher.  We also like SNAP on pullbacks as the model is predicting a new bull phase with the potential for 100% PLUS gains.  Finally, we’re very bullish wheat down here at a multi year low and have accumulated that commodity.

 

 

 

 

 

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Technology Stocks Look To Lead Bear Market Decline

 

Back in June, the Behavioral Analysis of Markets QQQ Model triggered a timely sell signal prior to a nasty fast-market decline off the all-time high. Since that sell signal trigger we’ve also seen recent sell signals in the Russell 2000 index as well as the DJIA and others.

 

This means that extreme caution is suggested by the BAM Model, meaning that we’re either out of longs or into short-positions.  You may view our original sell signals posted here on Linkedin.

 

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Possible Stock Market TOP

According to the BAM Stock Index Model, the SPY is due for a 10-20% decline starting today– February 10– and if we see perfect tracking of our intraday model, the decline will start off the high posted at 10:49 EST and sell-off into 2:20 pm EST today.  Assuming the market tracks our model, March-April would see the worst portion of this leg of the predicted sell-off.

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Flash Crash Window Opens 1/6 through 1/18

The major stock indexes have stretched time and price targets (without a lot of upside price gains) and our proprietary BAM-VI (Velocity Indicator) is warning of a potential flash-crash decline during the next two weeks of January.

 

Significant DJIA cash (break/acceleration) triggers are found at the following levels:

 

19875 (short below/flat above for Position Trader Model)

19611

18690

17629

 

 

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S&P 500 TOP Predicted on 11/22

The stock indexes tracked the BAM model–plunging 1000pts from high to low during election night–and we’ve now seen higher levels on a not-so-rare “inversion” leg over the past two weeks.

 

Inversions, per our work, are expected to see violent unwinding moves as they are associated (most frequently) with “false breakouts” within expanding patterns.  If this is the case currently, and we believe that it is, then we should see a violent move off today’s high (19016.54 intraday as I write) back to the downside over the coming weeks on a seasonally odd fast-market decline.

 

Assuming the market tracks the Behavioral Analysis of Market’s Model, we would see an “A-TOP” formation today followed by a sharp 7% decline or more during the coming several weeks.

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Don’t Be Fooled Again

As the election results began pouring in on the night of November 8th, the DOW futures reversed and started a 1000 point free-fall directly into the BAM Model’s predicted crash zone.

 

But, as has been the case in recent years, market manipulation soon took hold and an orchestrated squeeze ensued– carrying price to a new all-time high that looks to have stalled into the DJIA cash 18934 level.  These squeezes, we believe, are nothing more than an orchestrated price manipulation geared toward allowing investors of large positions an opportunity to exit longs and establish short positions.  (Only time will tell)

 

But according to our model, we’ve reached another opportunity to move out of long positions and into cash (or to sell-short select names as a way to profit during a predicted bear market).   Assuming the stock indexes track the Behavioral Analysis of Markets Model, this leg of the fast-market decline will unfold into the Thanksgiving period and possibly intensify into month-end.

 

We were mocked back in 2007 when we made a similar call based on the model’s prediction of a 50% bear market decline, and with the results of that forecast having been proven correct, we’re once again betting on the model as opposed to the economists and bias media.  In fact, according to the BAM Model, we’re on the verge of seeing the worst decline during this historically bullish Thanksgiving-to-Christmas period.

 

 

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Historic Stock Market Crash is at Hand

The relentless financial market intervention that started at the 2009 stock market low has (according to our model) created the most dangerous situation since 1929.

 

And although I could write a long-winded article about how this price set up was created, I’m going to simply post charts with price forecasts and let you all search the internet for potential fundamental problems that might fit the type of decline my model is calling for.

 

As you view the charts below, please think about the public arrogance displayed by certain market participants and remember that the most dangerous portfolio managers of past decades have, in retrospect, proven to be the ones that were too arrogant to consider that they might, possibly, be wrong about their macro assumptions.

 

Assuming that global stock markets track the Behavioral Analysis of Markets Model as they did from 2007–2009, the master’s of the universe will undoubtedly blame the multi-year crash on a “Black Swan” while the rest of us–using nothing more than observational skills and a little common sense–will know otherwise…

 

blog-weekly-indu

blog-weekly-spy

blog-weekly-ndx

 

blog-weekly-nyse

blog-weekly-russell

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Rare Screaming Sell Signal in Global Stock Indexes

On July 15th I posted the BAM Model’s very bearish outlook for the global stock indexes and since that time very little upside progress has been seen.  This type of upside shopping/topping action is referred to as an “inversion” per our work and during these periods the model tells us to not only exit shares of stocks, but to sell-short shares or to even buy 3x leveraged bearish vehicles like $SDOW $TVIX $UVXY $YANG $RUSS (etc.)

 

In other words, the global stock markets are even more bearish today than they were back at the July TOP.  (And keep in mind that the very broad NYSE Composite Index topped way back in June of 2015– a terrible sign if you follow the underpinnings of the supposed bull market)

 

Today I shared a statistic with Twitter followers that highlighted an emotional trigger system that seems to work very well at stock market extremes.  That trigger system is a simple “open rate” of the emails that I send out to paid subscribers each and every day.

 

Here’s how it works:

 

The threshold/ trigger that I’ve found to be very useful defines a 95-100% open rate as “high” and a 20-40% open rate as “low.”   High open rates tend to appear at market BOTTOMS (when bullish subscribers are concerned about stock prices and bearish subscribers are elated) and low open rates tend to appear at market TOPS (when bullish subscribers are unconcerned about stock prices and bearish subscribers are dejected.)

 

Recently, I have had two record low (open rate) triggers hit– one on July 20th and one on August 11th and my conclusion–when combined with all of the other bearish data the Behavioral Analysis of Markets Model has been generating–is that we are on the verge of a cascade decline that would see prices attack the February lows as we trade into September.

 

Special discounts available to readers of this post if they contact the sales desk –sales@baminvestor.com– and include subject line coupon #542362 to receive a full year of The BAM Report, our Global Professional Service’s BAM Model Portfolio, PLUS our Early Warning System all for only $2290 (Regularly $4788)

 

 

 

 

 

 

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JNUG and the Behavioral Analysis of Markets Model

My friend Cyrille Jubert is a France-based Gold and Silver markets expert featured by the largest financial newsletter publisher in the world.

 

Today, he chose to highlight the BAM Model’s JNUG forecast to his global audience and I wanted to share that forecast here so that new subscribers (that were not with us during the wild JNUG ride) can better understand how I exploit periods when the model says a market is mis-priced.

 

In my last post, I mentioned the idea of turning my pain into your own personal gain.  ((meaning that you can focus on BAM Model Portfolio (BMP) positions that show an open loss as a method for highlighting potentially over-sold names)).  The logic in this idea can be found in the BMP’s proven performance since inception February or 2015–  w/ a record of 83 closed winners, 2 closed losers, and 3 closed break-even trades.

 

And although all of you are well aware that I’m not a financial advisor and that I never provide trading or investment advice/directives here, I do understand that subscribers occasionally use some of the model’s predictions as a way to challenge and clarify their own thoughts.

 

In the case of JNUG, that name saw the largest inversion washout (to the downside) that I have ever recorded in my work.  Thus the reason I was so aggressive in sharing my enthusiasm (as well as what appeared to be outrageous targets) w/ subscribers as well as on Twitter.  @baminvestor

 

During early January 2016, JNUG traded as low as 20.52 into January 20th.

 

At the time, I was holding positions that were well under-water.  But the JNUG Model was predicting that prices would soon rebound not only to my entry levels, but well beyond in a HUGE advance carrying price back to 206 or above.

 

My confidence in a large move was based on the BAM Model’s proprietary upside “retest” levels and I was willing to hold steady and continue to be as patient as necessary while I waited for the forecast to unfold.

 

Then, as JNUG lifted off that January low, it did something that’s not unusual after a washout occurs (but very welcomed) —  it created a “melt-up” fractal, with all of the required components that I’ve discovered during my 30 plus years of studying the human emotion that drives market price action.

 

Fast-forward now to June 3rd when a specific window was identified and predicted to bring the most powerful (blow-off) portion of the actual melt-up.

 

If JNUG were to act normally during this melt-up window, we would expect to see an attack of the retest level at 206 on its way toward a potential attack of the primary speedline (formed by price-action generated way back on Jan 22nd through February 8th).

 

That’s when (June 3rd) we immediately sent an updated chart (seen below) of the model to subscribers alerting them about the model’s incredibly bullish near-term set up into 6/28 through 7/14 (and that’s also the chart Cyrille Jubert shared with his clients today)

 

We then continued to send charts to clients showing that JNUG was tracking nicely and that our ultra-bullish forecast was well intact.

 

Fortunately for us, $JNUG tracked the model perfectly and saw a speedline attack high at 315.04 on July 11 (a 1400% gain off the January low!)

 

Also fortunate for us, $JNUG then tracked the model on the downside as well when a collapse unfolded as soon as JNUG traded through the end of the window on 7/14.

 

As you can see in the final chart below, both the 206 retest as well as the speedline attack unfolded directly into the 6/28–7/14 “melt-up” window and shares accumulated into the 21-22 level during January.

JNUG-60MM-6-3-16 JNUG-60MM-6-7-16 JNUG-60MM-6-28-16 JNUG-60MM-7-15-16 JNUG-60MM-7-26-16

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Attack of 15970 Probable for Dow Jones Industrial Average

The Behavioral Analysis of Markets Model was built after studying the similarities of the pre/ and post 1929 stock market crash price-action as well as the pre and post 1987 stock market crash price-action.   And after multiple years, and multiple dead-ends, I finally noticed the exact same pattern of human emotion had unfolded during both of those periods– as well as a common topping count (waves of price-action) also tied to human emotion.

 

And while many analyst talk in terms of optimism and pessimism driving price action into highs and lows, I found that description to be deceiving for one simple reason.  All bull and bear legs (at any degree I’ve studied) terminate (form TOPS or BOTTOMS) on a combination of factors.  For example, a TOP is formed due to a combination of optimism (actual net new purchases of shares) as well as short-covering of shares.  So in this example, the net new purchases can be attributed to “optimism” but the fund managers and traders that either capitulate or forcibly cover their previously shorted shares are not optimistic at all.  Their short-covering is strictly a function of their own capitulation or the forced margin call (broker or risk desk).

 

But more importantly, I discovered what I later came to describe as “retest” levels.  Behavioral Analysis retest levels are completely different than the “retest” levels described and identified through using Technical Analysis.  Retest levels derived through the study of Technical Analysis are typically created on price breakouts or breakdowns and they’re obvious to anyone willing to look at a price chart.

 

Behavioral Analysis “retest” levels (the ones that I discovered, and the cornerstone of my price target work) are completely hidden to the naked eye when studying price charts and were only revealed to me when I took a reverse engineering approach to dissecting the 1929 and 1987 crashes.   In other words, I looked at the final price destination the crashes reached and then worked my way back in time looking for any odd activity that might have occurred at those same price levels during the past weeks, months, and years of price-action.

 

…Which brings us to the reason behind today’s post….

 

Today’s price-action in the DJIA once again shows a completed BAM TOPPING count, and more importantly, a similar (albeit smaller) version of the price fractals I discovered back in 1929 and 1987.  So assuming the DJIA tracks the historic price-action I’ve used to identify multiple mini-crashes, we should see a violent attack of the 15970 level in the Dow Jones Industrial Average during the 7/22–8/12  window (adjusted on 7/26) with the most likely Flash-Crash or mini crash occurring during the 7/28-8/8 period. (adjusted on 7/26)

 

The Behavioral Analysis of Markets Model long term forecast is predicting a July 2016 TOP in this area followed by a massive bear market decline carrying price back below the 2009 low.   We remain bullish Natural Gas, but not much more at this point…

 

*Disclosure:  I am long SPY PUTS at various strike prices and various expiration dates.

 

 

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