In a time of dismal performances, it’s tough taking credit for accuracy or capturing real alpha. WAVES.GLOBAL annual issue takes you through a complete year of work. The report which was started on 06 JAN 2008 started on an accurate note capturing the negative JAN (The JAN effect) and closes the year also on the right foot with its last positive call on 20 Nov 2008 (Selling the Trough) with DOW up 16% in barely a month.
Of all the indices we tracked viz. DOW (US), S&P (US), DAX (Germany), FTSE (UK), FCHI (France), IRTS (Russia), SSEC (China), BVSP (Brazil), BSESN( India) and NIFTY(India), we should admit, DOW was the toughest to track. The tracker (SLIDE 1) gives some explanation for this. Despite being the one creating the most negative news, DOW remained one of the top performer of the year with 35% loss YTD compared to say IRTS with 72% drop in value. When you compare markets around the world together as a group, it needs utmost emotional control to judge polarized performances i.e. being positive on one and negative on the other. This happened on many occasions during the year when we remained positive on the Russian and Brazilian Index, while negative on the rest (Emerging Cues). It was this polarized action which really kept us toiling throughout the year, analyzing the DOW and other market fractals week after week. It was on 28 Jan, after DOW hit anticipated targets (11,500) mentioned in the debut report (06 Jan), we saw a lot of oscillation around psychological 12,000 levels. We remained with a preferred positive view, looking at 12,000 as key levels to shift to the alternate negative view. And it was on 10 Mar and later on 17 Mar, near 11,500 levels that we first talked about the possibility of 7,750 levels. This is what we said on 10 Mar (DOW 12,000).
“We are entering the second week of MAR with a clear break at 12,000 DOW. This is not only a psychological break, but a break of high significance. The respective level was last breached in NOV 2006, and marks a seven year support. A lower close in MAR will also make this the first negative quarter out of the 33 year CYCLE impulse CHANNEL. After 12,000 DOW, the last support standing is at 11,500 prices. Below which prices could head to 10,000, which are CHANNEL DUPLICATION targets. 11,500 is also a FIBONACCI confluence and it’s tough to anticipate any ALTERNATE positivity if prices clearly move through these levels till DOW 10,000 breaks. After which historical highs might become fiction for a few decades.”
What happened was faster than we anticipated. We expected some supports at DOW 10,000 levels, but market surprised us, as it always does. The DOW was catching up with lost time. 30 Jun we illustrated the break at conventional supports. Then it was on 26 Aug we talked about OCT lows. Though OCT lows were marginally breached our positive call near DOW 7,550 levels continued to hold.
DAX was simpler. It was on 06 Jan we talked about targets 30% lower near 5,500. What happened was clock work. While CHINA was preparing for Olympics, we were talking about negativity on SSEC on 11 Feb. At 4,672 we were talking 36% lower at 3,000. We definitely were alone. Today Nikkei closed for the year, registering the worst ever year. But it was on 06 Jan we talked about 50% lower targets at 8,000. After we shifted from the preferred correction view to alternate negative view on 26 May, Indian markets continued to move as anticipated. Brazil made a new high, and only topped in July 2008. A rising market against a global slump was not easy to go negative on. But negative price confirmation and a primary channel break at 60,000 also put us back on BVSP. WAVES.GLOBAL’s best forecast was on Russia. We were right on top of IRTS and captured the complete move till 600. We have carried a complete snapshot with some latest updates on the Indices. We don’t see a negative JAN at this stage. Have a great new year.
Enjoy the latest WAVES.GLOBAL
WAVES.GLOBAL – WAVES.GLB is a perspective product published on Monday. The report highlights top GLOBAL indices and emerging market indices viz. Dow Jones Industrial (.DJI), S&P 500 (.GSPC), German DAX (.GDAXI), Russian IRTS (.IRTS), Shanghai Composite (.SSEC), Nikkei 225 (.N225), Brazil BOVESPA (.BVSP), Indian Sensex (.BSESN). The product covers all the DOW 30 stocks. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers and market trends.
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