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Valyooo (33.05)

My correction prediction, for fun



October 27, 2012 – Comments (7)

I was wrong last time, but I will try again.  Seems people are starting to talk correction, so heres my prediction, pretty specific:


Fundamentally: Earnings are starting to look terrible, bernanke knows he wont be in office forever, Europe is getting worse, China is slowing down, according to gann predictions more war will be next year...just a ton of bad going on with not much good. So, I have a short bias, so here is what my charting is telling me:

The rally is not over.  We are finishing up a wave 4 correction.  I think the market hits around 1423, then down to 1400 to finish wave 4.  From there you have wave 5 which has all the typical buyers pushing the market higher...the hedgefunds who have been underperforming the whole year, the people who missed out on the huge rally who want to buy the dip, the people who think the presidential election is good for the economy, the people who feel good around christmas time, etc.

I think this whole wave up could take only 2 weeks.  We either stall out around 1465 again, or more likely break to the upside and hit the upper channel line at 1480.


Once that happens, its all over.  Europe a mess, fiscal cliff a mess, 2012 armageddon (lol), borrowing costs increasing, inflation kicking in.  Probably sell off until around new years, bounce up a little bit in january, and then plummet even further.


I dont think it will be as bad as 2009 bottom because less leverage, and more liquidity, but I dont see why we cant drop 30%.


I am putting my money where my mouth is ES futures and selling options against my position.

Let's see what happens 

7 Comments – Post Your Own

#1) On October 27, 2012 at 2:57 PM, HarryCaraysGhost (56.25) wrote:

Sounds like a buying opportunity for your long term investments, I shedded the short term stuff at 1,100.

just a bit early...... 

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#2) On October 27, 2012 at 4:32 PM, anchak (99.89) wrote:

Ah the easy Elliott Wave money ---- PIII ---- Supercycle ---- and the whole shabang!

You may be right you know -- the last man standing always is.



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#3) On October 28, 2012 at 8:32 PM, Melaschasm (< 20) wrote:

A 30% correction seems way to big.  10-15% seems reasonable, with a small chance of 20%.  PE's are not sky high, there is plenty of pessimism, and we are starting to see real signs of recovery and growth.

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#4) On October 29, 2012 at 4:30 PM, JaysRage (79.64) wrote:

I was thinking something very similar....somewhere between late January and early March for a sizeable correction.     The market will tease long enough for the last bears to capitulate and give in to the "inevitable inflationary movement" and then the bottom will drop out.    I also agree with some of the reasoning around timing....

1) Election euphoria

2) End of year buying

3) Capitulation buying


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#5) On November 01, 2012 at 5:01 PM, bwll (32.15) wrote:

Somehow I think there's more potential for upside than is priced in.

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#6) On November 29, 2012 at 2:23 AM, valuemoney (< 20) wrote:

When the fiscal cliff is resolved in January or Febuary the Dow will go up at least a 1000 points in a week. Europe is the only thing really to drag us down a little. Everyone thinks it is bearish when accually it is bullish (fiscal cliff).

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#7) On November 29, 2012 at 2:26 AM, valuemoney (< 20) wrote:

We are in a 5 to 7 year bull market  and we are still in the LONG term bear market starting in 1999. This is only the 4th year of the bull market. I am guessing of course but an educated guess from pass history.

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