Tuesday, January 29, 2013

Market Analysis - 01/28/13

First of all, thank you all for being patient as there were no updates on the blog for almost 3 weeks. You can blame it on the Flu!! By the grace of God, I am now feeling much better and will try to post more frequently. Overall, markets have been going up persistently since November. Although main stream media is now getting excited and is suggesting that we are going to all time new highs, UST subscribers received a special report in early December highlighting the fact that the global markets had started a new bull market in early December.  

In fact, SP500 has gone from 1350 to 1500 in 2 months. This amounts to 11% rise or 66% annual gain. However, now market is reaching a crucial juncture. Along with the IPM Model Turn date, there are several Market Matrix red signals being generated right now. Market Matrix components showing red signals include:

  1. Elliott Wave structure
  2. Sentiment
  3. Technicals
  4. Leading markets
Lets understand the Elliott Wave structure of these markets.

SP500, DJIA and Global Stock Market index, all have pretty much the same wave structure. Therefore, we will use SP500 to evaluate the market structure as of January 25, 2012. Our primary count remains the same as it was presented in December 2012 because market has closely adhered to our analysis.  Following image shows what was predicted in early January.

As shown below, the market rose persistently during January in 3 of 3 wave. It was mentioned previously that 3 of 3 waves can last for a long time. During 3rd waves surprises normally happen to the upside. This is exactly what we have seen so far i.e. even with marginal earnings, Israel elections and debt-limit/sequestration concerns, market kept on rising. In this regard, IPM Model helped us a lot. IPM Model enabled us to remain long from end of December to late January (exact dates already mailed to subscribers). Thus, allowing us to reap most of the gains in this rally.

Please note that no rally continues forever and no market goes up straight. We are about to witness a similar situation in the U.S. and Global Markets. As of today, markets are approaching the end of wave (iii). After this markets will undergo minor wave (iv) correction followed by a rise to complete wave 3 (as shown above). Wave 3 completion will give way to wave (4) decline at a higher degree of trend. In other words, market will continue to go sideways/down till the next IPM Turn window (date will be emailed to subscribers). Market trajectory projections have already been emailed to subscribers as part of the IPM Model update.

Please note that the IPM Model predicted the current top back in December. During January, we witnessed how the market went from fear of fiscal-cliff to euphoria of all time highs. Right now, we are seeing excessive optimism, technical indicators are very overbought and Elliott Wave pattern is completing. Therefore, risk is very high for a market correction.

Once this sell-off starts, over the next few weeks we will start hearing all the bad news again. One of the most prominent bad news will deal with government spending cuts, and how they will adversely impact the GDP. But based on political analysis, it seems highly likely that sequestration will happen. Implementation of sequestration might result in a stock market rally because very few people will be expecting a rally after such excessive budget cuts.

In the next update, I will discuss the alternative Elliott Wave count which some analysts have been preaching. This count has far reaching bearish consequences. But the technical picture does not support this alternative count. Over the next few days, we will be discussing the nature of the upcoming correction so that one can plan his/her trades.

Weekly IPM Model Update
During this week, subscribers will receive a special weekly IPM Model update. Weekly IPM model outputs have been very accurate over the past few years. The helped in predicting several key market turns, and are sent to subscribers as part of special updates. Some of the past predictions include: May 2011 top, Oct 2011 bottom, Sept 2013 top and so on.

If interested in IPM Model Subscription or Weekly IPM Report, please fill out the form below. IPM Subscription will be closed after a limited number of subscribers to maintains models validity. Model Performance


  1. Now we have got the reason for the bears to come out!!! Its so coincidental!! Good thing we sold out late last week.

  2. In few weeks this negative GDP number will provide us with the reason to buy back in because it will bring back fear, and it will force FED to continue printing.


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