I am going to post a chart here which should give you a rock solid dose of long term thinking. Ponder for a moment your long term opinion on the market.. do you have one? Bearish, Bullish or in between? It goes without saying that a fairly confident long term forecast can help so many of your trading decisions between now and the end point of your forecast…
But a long term forecast is extremely difficult to gauge with accuracy for the same reason that a long term forecast of weather patterns is just as difficult… However, I do believe that the market is easier to forecast on a long term basis than the weather 🙂 .
The chart at the below link is one I made of the Dow Jones Industrial Average.
Note that the Dow Jones Industrial Average has been up until TODAY in a sideways basing pattern with 2 FULL YEARS of CAUSE. We also have a large symmetrical triangle pattern that is nearing the apex.
The inset chart is the 8.6 global business cycle model. This cycle model has over time made some STUNNING forecasts. Notably, many of these stunning forecasts were in existence decades before they even happened!
Note in the chart the 1998.55 peak forecast… which you probably remember as being the beginning of the asian currency crisis. That peak, July 20th, 1998 was an astounding forecast. It was perhaps one of the most famous and precise forecasts of the 8.6 year cycle model. The next most famous one was the precise forecast of the 1987 peak and crash.
The chart I have drawn shows the the cycle model also accurately predicted the major low of the bear market in 2002.85.
The next major peak is forecast to be 2007.15 or February 25th, 2007. Simple trendline analysis predicts about 14,000 target on the Dow Jones Industrial Average by this date.
Mark this date on your calendar! February 25th, 2007 !
An extraordinary run is coming that will take the Dow to new all time highs!
Peace.
Thomas
what’s next
:bull: when is the bear market going to end ? 🙁
Well I will provide a more detailed update soon. But right now as we speak we are very close to a sustainable bottom. As of the date of this comment we should start to see a good size rally in the Dow Jones Industrial Average that will send it first to 9100 and then onto 10,500. It is possible we could see 10,500 by April 2009.
As far as the bear market ending it is probably important to define exactly what we mean by bear market or bull market because there can be confusing definitions.
My take right now is that we are in an extended long term bear market that should extend out to as late as 2016. However keep in mind that this does not mean that we can get mini bull markets in between now and that time frame. So what I am saying is that we will have a zig zag type marketplace where you have to be nimble enough to catch the major swings over the coming decade.
But anyway, for now we are ready to go up and in a pretty good way.
Tom
10,500, eh? We’ll be very lucky to get back above 7,000 by April.