NASDAQ-100 in its panic year 2015

 

W.D. Gann developed and worked inter alia with a Financial Time Table based on a cycle of exactly 18.6 years (18 years and 8 months), linked with his famous recovering of a "decade cycle".

 

As to his detection, in the 5th year of each decade, hence the years ending with 5, the US stock markets use to experience a year of ascension and a very strong year for a bull market.

 

Source: http://www.seasonalcharts.com/zyklen_dekad_dowjones_100j.html

 

For the present year 2015, the linkage of the 18.6-year cycle of the US markets with the decade cycle throws up a panic year in Gann’s Financial Time Table.


2015 is most likely to become a panic year. This means concretely for us and the US stock markets:


The US markets are supposed to – respectively they really can’t but - adopt 3 options in 2015. It’s A or B or C. Characteristics of all 3 options are high volatility, exaggerations, even deviate exaggerations (= exhaustions) into the year highs respectively year lows:

 

Sketching option A: Sturdy, tough buying panic appears, starting soon, the US markets will explode subsequently (that means at least 15% yearly performance, probably more), and 2015 is going to proceed about the way 2014 did, becoming a sound uptrend year being marked the low of the year in the first 3 months and the highs again by the end of the year and closing 2015 close to yearly highs.

 

Source: http://www.seasonalcharts.com/zyklen_wahl_dowjones_preelection.html


The seasonality is speaking a plain language. Beyond doubt synchronously the decade cycle as well as the typical performance of the pre-election year are pointing to option A to happen!


Or option B becomes effective:


Sketching option B: Instead of succeeding a buying panic the US markets will soon switch into a waterfall-like decline losing on tom more than 15% from the present levels. The current January weakness intensifies in February and/or in March, thus beginning a waterfall-like decline, not bottoming out before autumn including subsequent recuperation into the year end. Instead of being driven by a buying panic, 2015 shows a selling panic because of a cycle inversion!


Or option C will occur: It’s my favorite variant for 2015. This version shows the complete panic spectrum. First comes greed followed by fear – a last bull-market rally followed by a panic-like sell-off.


Sketching option C: At first buying panic – beginning with the February 2015 low, at the very latest starting at the March 2015 low. This buying panic leads to a parabolic ascent into the absolute yearly highs being supposed to be made in August and/or September. The year high should be an exhaustion high. There, at the August and/or September highs, the humor of the stock markets turns changing from buying panic to the sell-off mode. With an initially high sell-off volume the markets will fall for more than 12 months then… From the August and/or September high 2015 will technically start a bear market on weekly base, as to my assessment at the moment!


The reason why at all we shall experience a buying panic starting very soon?! Hereinafter the explanation for that. By means of the NASDAQ-100 Index, with the help of the current monthly GUNNER24 Signals, simple chart technique and interpretation the following view and time lapse inclusive signaling for the year 2015:

 

 

The index keeps on respecting perfectly the magnets put out by the domineering monthly 34 Candle GUNNER24 Up Setup.


The ongoing rally topped out in November, exactly at the GUNNER24 Horizontal Resistance taking its course at 4347.


With the unambiguous November 2014 close above the 2nd double arc the next higher double arc in trend direction was activated as the next target. With a probability of more than a 60% the next higher double arc will now be worked off as early as in 2015.


I release now an uptarget for this rally at 5250 as a very important possible target and bull-market top! It might be around 5700 points as well. That’s because I can presently assess the timing = time for the coming months much better than the price. Especially in case of an expected exhaustion into a likely important secular bull market high, even a rudimentarily safe price prediction for the top provided 7-8 months in advance seems to me impossible for the time being. For the exact price determination of the possible price top there will be plenty of time left. At first, the start of a buying panic will have to be confirmed…


The December 2014 as well as the January 2015 candle are consolidating the last rally leg now. Even though both last months dipped into the support region of the upper and lower lines of the 2nd double arc, they clear closed above it. Neither closed any week of the year 2015 below the upper line of the 2nd. Thereby the upper line of the 2nd double arc is so far – in 2015 – unequivocally confirmed support on monthly and weekly base.


So, December 2014 and January 2015 consolidated the last rally leg very narrow to the rally highs without harming any important monthly support. I think, the market is gathering power for a new – strong rally leg. The overbought condition in the weekly time frame is currently being reduced. The next rally leg is technically supposed to start at the February lows. At the latest the March low is where the several times mentioned buying panic is likely to proceed from…


You respectively we can be absolutely positive that the buying panic will have begun when the November-2014 highs are being exceeded – no matter which way, on weekly closing base, daily closing base or intraday. As soon as the market trades above the 4347.09 the party time into the August respectively September 2015 highs will start "officially"!

 

Here we see by what the market should/will be forced now into the August/September secular bull market highs. Actually it’s a pretty safe matter…:

 

 

The bull market is being forced upwards by an arc support. I call it a panic arc because one way or another it will always lead to at least one more panic attack in 2015. Each of the 4 touches with the panic arc meant the end of a several month correction in the bull. Each touch with a panic arc made the market rise for several months subsequently. The first touch with the panic arc meant the first higher low after the index had turned from the 2008/2009 Lehman lows.


The second, third and fourth higher lows of the current bull were delivered also at the panic arc. The lower shadows of the 4 higher bull markeet lows are becoming longer and longer, i.e. the panic arc generated more and more powerful rebound energy.


Somehow it’s obvious now that February 2015 actually should newly touch the panic arc.


And actually also this next touch with the panic arc should mark another higher low of this bull. The current consolidation is technically expected to finish at the February 2015 lows.


…starting there the next – the last runaway move – of this bull.


What will happen however if February 2015 leaves the panic arc downwards? In this case the following is supposed to happen:

 

==> the next lower, the absolutely strongest secular bull market support should become effective in that case, parabolically chasing the market into the year high. Technically it should…!!

 

 

There is another, much more important bull arc support. This arc support was responsible for the important higher bear bottoms of the years 2002 and 2008/2009. Mind about this the blue ovals. If February 2015 and/or March 2015 reach this panic arc at the lows, the next test – the third of this important decade support altogether then – should have to release enough buying power to trigger another runaway move, the last exhaustion move of this bull.


The supports of both panic arcs expire SIMULTANEOUSLY in August respectively September 2015. Before that, the market is supported positively in terms of time being likely to pass into a parabolic rise because both panic arcs = support take a steeper and steeper upwards course.


If the panic arcs lose their support influence, i.e. if their upwards directed energy state ends because the time is signaling so, technically the change in trend will succeed. Mostly the markets fall brutally and faster than they had risen before, as soon as arc supports expire temporally. After an exhaustion into the high technically the crash follows – fast, tough and relentless. It’s the start of a correction probably lasting more than a year in the overriding secular bull market = option C.


==> Only if the second low panic arc at the expected February/March 2015 lows does not hold, finally breaking, then and there a sell-off wave will start that is to be expected for 2015 in any case. It’s the option B, sketched as well at the outset.


I’ve still got another one.


An example for what W.D. Gann describes with the term "law of vibration". The total harmony between price and time. The inner membrane of mankind, the expression for the fact the future is defined in the past, that the past unconsciously influences on what we are doing in the present without understanding even rudimentally why it is the way it is – the way the masses of investors and traders – millions of people with all their billions of capital – manage in 2014 to capture important time- and price-conspicuities of the year 2000.

 

I call it the "panic setup", let’s at first consider exactly the rally move that has lasted 8 months:

 

 

This last rally went from the absolute 2014 low to the absolute high of the year 2014. This rally has lasted 8 months. Fib Number. The high of the rally is rather exactly at the opening of the April 2000 candle. That’s where and when the sell-off move of the 2000 all-time highs (ATH) began, I think, because from the opening of the Month of April 2000 it went just downwards in succession.


Since we measure the 8 months of the 2014 rally with the Blue Arc, we automatically define the first square line. Thus, the first square line is the most important and strongest resistance on monthly base. the first square line corresponds to the opening of the March 2000 ATH candle. I captured this harmony according to price and time with both red lines narrow to each other and the blue rectangle.


Since from the 8 month rally of the year 2014 the further future magnets of this panic setup are deriving by themselves, and that the next higher GUNNER24 Resistance corresponds completely harmonically to the March 2000 ATH is an astonishing conjuncture = law of vibration!


To the signaling:


The last 4 candles of the index mind and respect the thin green GUNNER24 Diagonal at a monthly high (October 2014) and the November 2014 to January 2015 lows. We know from both panic arcs that technically either the February or the March 2015 lows should have to set the starting point for the next leg of the runaway move. I think, that the green GUNNER24 Diagonal should actually give the starting signal for the exhaustion into the August/September 2015 highs as early as in February. Each price above the November 2014 highs would produce a safe next buy signal and the final confirmation for the beginning of the buying panic.


Therewith, so to speak the current minimum target of this bull market is newly confirmed and FINALLY activated. It’s the matter of the 2000 ATH surroundings, situated at the first double arc resistance. Not before the first double arc is reached, a new bear market lasting more than 12 months will be "allowed" to begin.

 

However, I work on the assumption that the ATH and the first double arc resistance within the runaway move will be overcome easily and laxly. Both parabolic panic arcs are supposed to release enormous upwards energy thrusts until autumn. So I think that the runaway move will have to go at least to the lower line of the 2nd double arc = main target until August/September 2015 are the 5250. If the 2nd double arc is taken upwards on monthly closing base – cannot be ruled out in a parabolic upmove – easily and laxly even 5700 will potentially be reached.  


Be a part of our exclusive sworn GUNNER24 Trader Community – now... I try to protect your wealth!

 

 

Click the button below and order the GUNNER24 Trade of the Day - $49.90 US a month.

 

 

Be prepared!

 

Eduard Altmann