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Market Timing

Thursday, 02 July 2015

This is a re-visit of my blog of Mar 15, 2015
- see updated graph below !!!
- are we getting close to the end ?
- is Grexit going to be the final catalyst "IF" it defaults ?
- do we need to get out now ?
Wait for MIPS to tell us what to do (stay tuned) !!!

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C O N F ID E N T I A L

From Paul D.
- this is simply my opinion / observation and it has nothing to do with our MIPS models...

Expect a market crash before August 2015 ???
In the graph below, you will see that it took 11-12 months of sideways trading for the market (the SPY) to "top out" in both 1999-2000 and in 2007-2008. 

My opinion is that this is roughly how long it takes for the big guys (Goldman Sachs, Morgan Stanley, UBS, etc) to liquidate the holdings that they want to dump at the top (call me and I will explain this). For example, it would take months for a big guy to sell 100 million shares each of GE and Walmart and Merck, etc without driving their prices through the floor. And, at the top, they hold 1,000's of positions just like that.

In the graph below, you can see that in 2014-2015 the market has basically traded sideways for 6 full months through Feb 2015, or 7 months counting March 2015 [it has been10 months now through June 2015; and the SPY is sitting on, or breaking through, the long-term trendline].  So, after 7 months in this sideways trading pattern, if the market stays in this relatively flat range for a few more months (highly likely), I believe that a Big Crash will come in July or August 2015 (most likely July 2015).  If not, we could see the S&P 500 at 2500 or higher before the big crash finally comes.  [New - The end of July 2015 will mark the 11th month this sideways market has been in effect.  Previous crashes happened after "topping" for 11-12 months !!! ]

This definitely does not mean that the MIPS models see the market the same way that I do (thankfully), so let's be patient while the market makes up its mind and MIPS follows it.   Stay tuned ...
Updated on 7/01/2015

Posted by: Dr. G. Paul Distefano AT 01:51 am   |  Permalink   |  Email

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