In the Summer of 2001, with the Industrials well above 10,000, I did a research paper that suggested with almost certainty we were about to see a major decline take place in the stock market. Based on history, my study suggested a 100% probability of a move below the 1998 4-year cycle lows as the market moved down into the 2002 4-year cycle low. This did in fact occur as the 2002 4-year cycle lows were made in not only the Industrials, but also the S&P 500, the Dow Jones Utility Average, the Dow Jones Transportation Average, the New York Composite Index, the Russell 1000 and the Wilshire 5000. In my research paper I specifically said that the Dow Jones Industrial Average would close below 7,400 in the Fall of 2002. This documentation was published in the November 2001 issue of Technical Analysis of Stocks and Commodities Magazine. If you would like a copy of this article, please make an e-mail request.
In July 2001 I said the Dow Jones Industrial Average would close below 7,400 in the Fall of 2002. Again, This was published in the November 2001 issue of Technical Analysis of Stocks and Commodities Magazine.
In both my April and May 2002 newsletters I warned that we had a 97% probability, based on history, that the stock market was about to move below the September 2001 lows, which again was proven correct.
In the May 2002 newsletter I warned that I felt the seasonal cycle in the U.S. Dollar had occurred as well as the 4-year cycle top. I further warned that based on my studies of cycles we had a 100% probability of a move below 111 in the U.S. Dollar. Again, this obviously proved to be correct.
In the June 2002 newsletter I stated, “we are about to see the bear market accelerate.” This obviously happened as well.
In the July 2002 newsletter I said “If you are still long stocks I would GET OUT.” This was a timely call as well.
In the October 2002 newsletter I said “Expect the Bear to get Nasty again as the Dow moves into the 4-year cycle low, due between November 15, 2002 and January 17, 2003. This low should take the Dow below 7,400 and most likely into the mid 6000 range!”
We got the close below 7,400. October 2002 did mark the 4-year cycle bottom, but the mid 6000 range was not seen.
I have also developed a very unique indicator that has become the cornerstone of my analysis in regard to market turns. I call this indicator the “Cycle Turn Indicator.” It was originally developed to help identify the 10 and 22-week cycle tops and bottoms in the stock market and it works great. I then found that it works on other markets and even other timeframes. Throughout 2006 and 2007 I used statistical analysis along with my Cycle Turn Indicator to warn my subscribers that the 4-year cycle low had not occurred, that “the 4-year cycle was extending and that the fallout was still ahead.” In October 2007 I had a long-term cyclical sell on equities and by November 2007 the Dow theory had confirmed a bearish Primary Trend change, all of which was published in the newsletter and in the short-term updates. I also called the housing top using statistics and the Cycle Turn Indicator in 2005. These same methods were also used to call the low seen in the dollar in early 2008. As commodities approached their tops in July 2008 I warned that they were in parabolic advances and in mid-July issued a sell signal, based upon these statistics and the Cycle Turn Indicator, right when everyone was calling for $200 oil. In fact, I told my subscribers for months in advance that the dollar was bottoming and that the entire commodity complex was in “a parabolic advance” and that parabolic advances were “ending moves.” I also gave statistical benchmarks to watch for in regard to this the top in commodities 6 months in advance and in July those benchmarks were seen exactly as the statistics suggested. Again, it was the use of statistical analysis and the Cycle Turn Indicator that confirmed the July top right when many others were calling for $200 oil. My methods told me that a major top had occurred and this too has since proven correct. I also issued a sell signal on gold in mid-July warning subscribers of the decline. Then, as gold approached the September lows I told subscribers that an intermediate-term cycle low was due. The statistics and the Cycle Turn Indicator have proven to be extremely valuable tools over the years.