Sunday, December 18, 2011

End of Year Rally or Wash-out!!!

Although the UST proprietary market index is in a downtrend and in a pronounced bear market, major indices like SP500 and DJIA are holding up. However, the following chart shows the possibility of a series of 1s and 2s in the stock market. If this Elliott Wave analysis is true, we might be in for a sharp decline really soon.

On a larger scale, markets are tracing out a Head and Shoulder's pattern. This pattern would mean that we are about to embark on a sharp down move. This pattern will be confirmed of a decline below 1185 (SP500.

The Inflection Point Model predicted that the markets could top on December 5, 2011. Dec 5 has so far turned out to be the top date for Nasdaq and Russell 2000, with DJIA and SP500 topping 2 days later. It seems like the next turn date is 2-3 weeks away (chart given below). Exact date has been calculated and will be sent to the subscribers. Please note that IPM showed a top when everyone was looking forward to the end of year, Santa Claus rally.
Lets see what the last two weeks of 2011 bring for the markets. Please note that according to our wave and time analysis, we are about to witness a sharp decline in to the end of the year. As always, this scenario is bounded with 1250 (SP500) level. A break above this level, will nullify the decline potential.

We will bring down the stops to 1230, once the market decline sharply.

Note: UST market update frequency will increase after December 21, 2011


  1. Are we really going in to a large scale Head and Shoulder pattern? What do you all think? I don't really want to imagine we are going to. I'm reading the Euro will be 1.10 next year or 2013, our debt has skyrocketed to unimaginable figures, etc, etc. Things are looking bad. How are we going to get out of this mess? Is the large scale Head and Shoulder pattern happening?

  2. Mr. Naqvi. Is the large scale H%S estimate from a 10 year analysis or from 2008 until now.

  3. I'm looking at the near term head and shoulders pattern as an opportunity before the next trend reversal. I have a limited number of times I can trade my retirement account per month (3x, and the third time has to go to Governemnt Bonds) and the trading system is very clunky (the government's Thrift Savings Plan). When I trade, it has to be done by noon on the day of the trade and the trade doesn't occur until after the market closes. In this choppy market, you could be looking good for a trade at noon, but get your face ripped off by the close of the day when the actual trade goes through and by that time, you can't get out of the trade. I have to take Mohammad's analysis and use it a little more long term. I tried to shorten my time frame on a trade at the end of October and I lost my interest for the year (~4%), but retained the principle that I started with and in this choppy market, I don't think that was too bad considering that if I waited another day or two, I would have taken a pretty sizeable hit on principle. I'm speaking for only me and my retirement account, which doesn't allow me to trade short, I must wait for bull markets or bull runs to make money. I think 2012 will have more bull market opportunities than 2011 that will hopefully be a little longer term than just a couple of days. I cant get in and out fast enough for couple day pop, my retirement trading parameters are simply too clunky for me to participate in this type of trading.

    Good luck all in your trading goals!

  4. Are we in a uptrend now?

  5. Any updates? We are over 1265 S&P.


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