Short Term Market Volatility On The Increase

A few days ago I showed you a chart, which outlines the cyclical momentum now till April based on Henning Schaefer's Cosmotrend.  It is now quite likely that reality follows the outline.

The chart shows
  • a peak in the markets earlier this week, 
  • again early next week and 
  • then a volatile phase immediately thereafter 
which could bring a pullback, especially for those markets that have yet experienced a sizeable downside momentum in recent days. 

Hence, we should not simply buy into a falling market like today, but wait till early next week, when the effects of the volatile phase should culminate, find a low point and immediately start rallying from there.  This kind of market is quite difficult to trade, - and I am glad I have approached this entry with 2 steps already, now targeting one more for early next week.  We shall see how we fare, - but so far - not so bad at all, as most of the funds we switched into show positive returns often in excess of 1% (last Friday's price).

Singapore shares beating a menacing retreat - only to recover, soon!
The next chart is a 'follow-through' of the STI chart I did recently:

We seen lower lows than I had forecast. This suggest that the upside now is 'easier' to be had (less downside risk to account for), and even a rally to the previous yearly high of 3300 would deliver nice enough returns.  However, if the above cyclical chart, based on the DAX (German Share Index), is anything to go by, this high may not be enough...

The time-line (red vertical line) is of significance, especially since it finds a conspirator in the Fibonacci time scale (green vertical line) in the immediate vicinity.  So, end of March will probably an opportune time to check the investment parameters and - gains in the portfolio.  

The fact that the WALL OF WORRY is growing again, suggest that professional investors are the main participants in the markets, which typically rise against it. 

Happy investing.  

Comments

Post a Comment

Popular posts from this blog

Financial Markets Out Of Sync Part I

Image
click here for  Financial Markets Out Of Sync Part II In my last post, I reintroduced my model . How else can I prove that my work carries benefits? Soon, I will elaborate on the model attribution, its strategy, and the reasoning behind the tactical changes over time.   Today, it's all about WHERE WE ARE RIGHT NOW with the markets. Last week, I said, global equities are getting out of sync. Now we can show how disjointed the markets have become. The information may help the experienced investor, though everyone wants direction and targets for future market moves. I will do so in this report, valid for the coming weeks, covering equities, commodities and currencies, each asset class in a separate blog post. It's an extra chance to adjust your positions accordingly, if you think my mumblings make sense.  Part 1 EQUITIES - USA and Canada equities I will show charts of Northern American, European, and Asian indices. You will note the divergence, and the red fat ar
Read more

A Turning Point in the Making

Image
The WOW-factor to be had from combining technical analysis of the financial markets and the time cycles once again managed to make my hair stand on ends! Last night's losses in the US stock markets came when Mr Average least expected it, - and the size of the step down mirrors the step up on July 7 th . It also means that the pull back is a very short term affair, as the one day move has retraced almost 50% of the advance in the DJIA . What becomes clear from the chart that the most recent advance, commencing July 5th, was doomed to fail as soon as it would enter the Ichimoku Cloud (blue shaded cloud form) at a point, where the formation was very dense. It is exactly the reason, why I recommended to remain on the sidelines during this hapless endeavour. Now that we are out of the cloud, the immediate downward pressure will ease. How much more downside is left? Where are the potential support levels? The 50% retracement for the short term move in July would be 10,040 1
Read more

Financial Markets Out Of Sync Part II

Image
In continuing our short-term assessment of financial markets, today's report covers European ind ices.  If you want to check back on US and Canadian indices in Part I, click here . Last Sunday, I concluded that a new leg down in equities has started. It should reach a first significant low point around April 18, +/- 3 days. The sell-off could be strongest in large and mega cap stocks. Can this be confirmed by the cycle research in European indices? Part II - European Equities I indicated earlier that European equities have been correcting since last April.   1. EuroStoxx 50 EUROSTOXX50, a 1-year view: a 1 year correction that has more downside to come. DATA SOURCE: chartnexus In this chart I want show you how the price moves formed, where we are at now, and the outlook for the next few weeks. The peak in April 2015 is very prominent. Visually, it is also the starting point of the downturn. Focussing on the left half of the chart, please observe how this gradual d
Read more