low pattern that we outlined as far back as September 25thfor our subscribers.
Our work centers around sentiment and crowd behavior, the headlines are of interest but only tell you the psychology of the publishing arms or talking heads at the time. Often headlines can be negative and the market climbs, or positive and the market is dropping. So the key for our work is figuring out where we are in the sentiment patterns of the crowd, and then to anticipate the pivots ahead of time and invest accordingly.
In fact, in just 24 hours or so we had a 43 point SP 500 drop… this is interesting because the same thing happened at the June 2012 lows as well. Back then we had outlined pivots in the 1250-1270 areas as likely lows, and the market ended up bottoming at 1267. This bottom area yesterday fits within pivots we were able to anticipate 7 weeks ago, without any knowledge of the election or other headlines around the world.
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Often, major washout days like yesterday centering around major news (Election) can create the final panic sell-off to complete a wave pattern of negative sentiment to the downside and then reverse the markets higher in new bullish pattern. To be sure, there are many sentiment headwinds like the Fiscal Cliff and more in the coming weeks…but markets tend to price all that in ahead of time right?
At yesterdays lows the market seems to have completed all requirements for a C wave of an ABC complicated decline from the 1474 SP 500 highs and so far an 8 Fibonacci week correction period.
What we expect is a rally now and again, we need to get back up and over 1423-1427 pivots this time and hold more than 24 hours, but the odds of a rally are now at 75% from here. IF we fail to hold the 1388 pivots, then the next levels are 1372 and 1363 to watch.
Bottom Line? Most metrics have been met for a wave pattern low, (Whether this be wave 4 or wave 2 doesnt much matter just yet) and the market now has a chance to start a wave 5 or wave 3 rally to the upside. Lets watch 1388 areas to hold first, then we will watch 1403, then 1423-1427 pivots to clear. We are neutral to bullish now after this washout
Back on Sept 25th we did a chart forecasting a drop to 1395-1400 as likely before the downtrend would end, now let’s see if the market can get some legs here. We have included that old chart here to show you how crowds are fairly predictable in their behavioral patterns in advance.
David Banister – We believe that markets move largely based on important swings in sentiment, crowd behavioral patterns, Fibonacci Re-tracements, Cycles, and other ephemeral catalysts. The headlines explain what just happened in the market, but they do not predict the next moves up or down in the indices, sectors, or commodities. As an investor, you need to be armed with tools in advance of major moves that are accurate, and TMTF will assist you in being prepared as an investor for volatile markets both on the upside and downside. We have a wealth of technical analysis experience to take advantage of the crowd behavior in the markets. Our Chief Strategist, David Banister, has been quoted and or written articles on CBS Marketwatch.com, 321gold.com, TheStreet.Com, SafeHaven.com, Kitco.com, Stockhouse.com, Theaureport.com, along with other well known investment sites. David has been a past guest on the national radio show “Money Matter$”. Chris Vermeulen of Thegoldandoilguy.com met David in 2008 as the financial crisis was unfolding. After numerous months of following the forecasts and trading abilities of Mr. Banister, Chris suggested that a joint venture be formed and we offer a trading service to a finite and select group of partners (subscribers). ActiveTradingPartners.Com was formed in July of 2009, and with the success of that service, we now launch The Market Trend Forecast in March of 2010.