Posted on 12/04/2019 10:45:43 AM PST by SeekAndFind
Relax — the stock market’s decline that began on Black Friday is not likely to be more severe than a 4% to 8% pullback. In fact, you might even welcome such a reversal, since it would create conditions for the U.S. market to climb to new all-time highs in early 2020.
These are the latest forecasts from Hayes Martin, president of Market Extremes, an investment consulting firm that focuses on major market turning points. I was introduced to Martin several years ago by David Aronson, author of Evidence-Based Technical Analysis and co-author (with Dr. Timothy Masters) of Statistically Sound Machine Learning for Algorithmic Trading of Financial Instruments. According to Aronson, no one is doing more careful or rigorous work analyzing past market tops or bottoms than Martin.
The last market top Martin alerted me to was in late September 2018, when he predicted that an 8% to 13% decline was imminent. As it happened, the decline — which started just two days after I wrote a column about his prediction — was more severe, taking 18.8% off the Dow Jones Industrial Average DJIA, +0.73% . That said, in the inexact world of stock market prediction, Martin’s forecast of that decline is admirably close to being on target.
Although Martin was two months early in forecasting a strong recovery in the wake of that decline, I imagine that few of his clients are complaining. The Dow now is 13% higher than where it stood when he forecast a 10% to 14% rally. (Full disclosure: Martin does not have a newsletter, and my performance-tracking firm does not audit his returns.)
The reason Martin is not forecasting a major decline right now is that most of the market’s sectors have participated in the market’s recent runup to new highs.
(Excerpt) Read more at marketwatch.com ...
Well, all right then. Giddy up!
Damn that Trump, he’s ruining everything….
“Statistically Sound Machine Learning for Algorithmic Trading of Financial Instruments”
….what a catchy title.
CNBC nimrods:
Chief economist says trade war fears are overblown
Dec 3, 2019
https://www.youtube.com/watch?v=jyfKqZUM9QA
I think that guy is right about the stock market, only because there is no other place to put your money. CDs pay 1%. Bonds pay 2%. So it’s either the stock market, or watch inflation take away your buying power.
Of course things would drastically change if the Fed raised rates, and bonds started paying much more. But that might happen essentially never. Because governments love to borrow, and higher rates would restrict that.
So I think the fix is in. Low rates for the foreseeable future.
Disclaimer: Just my wild guess. The Fed will not return my phone calls. So I really don’t know what they’re thinking.
If only we had more shovel-ready jobs.
I’m a Wall Street professional for 28 yrs...never heard of this “respected market timer”.
Fake news all started with financial news.
Damon Vickers used to predict major market turn arounds.
uh oh. Sounds just like the old classic pump and dump scheme.
“If only we had more shovel-ready jobs.”
SNORT!! Yes, if only the great Light-Bringing Guru himself would come back and tell us how there is no magic wand.
I think this “guru” makes his money from publishing predictions, not from buying and selling stock.
My one experience from trying to time the market was when I sold a bond fund to buy stock funds after three weeks of down market. The following three weeks the market dropped more than the prior three weeks. I decided trying to time the market was a suckers bet and have stayed with reinvesting dividends since then.
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