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.
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.