DJIA: 05/22/2017


Charted above is the DJIA along with several VTLs and a 40 week FLD. The Green VTL is that of the 20 week cycle. It seems evident that the peak of the second 20 week cycle of the second 40 week cycle has been realized due to the break of the VTL to the downside. Considering that we are in the final 20 week cycle within the current 18 month wave, such a break suggests that we have begun the correction of the 18 month have or have begun it last March. After analyzing the peaks of the DJIA I have come to the realization that a break of the 40 week FLD in pink would suggest that the 54 year cycle has peaked since we are currently in the final 18 month wave of the 54 year cycle when the peaks are analyzed as troughs. It is important to note that the underlying risks in the markets are huge at this current point in time and instant liquidation is the best thing to do from an investment, trading and even scalping perspective unless one wants to short the market or bet on a decline by buying puts. The pink VTL is that of the 40 week cycle a break of which would also indicate a peak of the 54 year wave with a significant decline being around the corner. It is important to realize that the end is here in terms of stock market advances since we are on the verge of a cyclical recession at the time of writing considering that the current economic expansion is one of the longest on record and a recession is long overdue. Let us now take a look at a projection on the NDX in order to discern when the inevitable crash is likely to occur.


The correlation coefficient of the projection line with recent prices in the Nasdaq composite index is 98%. We are on the verge of a catastrophic decline in terms of the technology sector that should resemble that of the tech bust in the year 2000. It is important to realize that there is not much left in terms of the rally and the downside risks are huge in the upcoming environment. If there is any sector that I would bet against it certainly would be the technology sector considering that it is the most overvalued in the market along with the fact that we are under a similar cyclical circumstance as the tech bust in the year 2000. Speculators should begin to buy puts on the QQQs, SPY and DIY since this time no one will be able to come to the rescue and the declines are likely to be severe.


Leave a Reply

Your email address will not be published. Required fields are marked *