Monday, April 18, 2011

Mid April 2011 Buy? - Inflection Point Model

In the name of God, who granted me insight, knowledge and wisdom to walk through the confusing financial markets. On March 5, 2011, it was stated that the inflection point models were suggesting a bottom in the financial markets around March 14, 2011 (+/- 4 days). Later, it was stated on March 21, 2011 that "With cycles bottoming, technicals improving, sentiment pessimistic and waves complete, the risk-reward ratio is very low. This suggests that we are witnessing a good buying opportunity.

Interestingly, the market bottomed on March 16, 2011 at 1250 and immediately jumped to 1340 within next 14 trading days. Since then the market has chopped around without exceeding the February highs. Although I have been out of the market during this chop fest, I am keenly watching the unfolding socioeconomic situation, Elliott Wave pattern, sentiment gyrations and the Inflection Point Model. 

Model 1 and Model 2 first produced the mid April turn date on March 30, 2011 ( In order to further refine the projections, the two Inflection Point Models were re-run and following conclusions were achieved. 

Model 1 and model 2 are both suggesting that the next market turn date will be around April 18, 2011 (+/- 4 days). Therefore, we can have a turn window from April 13 to April 22. This means that it is possible that we might have already seen the bottom in the equity markets on April 14, 2011 @ 1302 (SP500). Furthermore, week of April 15 was the options expirations week and many times market turns during options expiration. 

I will further analyze the market from the following perspectives to better understand the future market trajectory:

1- Sentiment
2- Elliott Wave structure of Indices, US Dollar and Commodities 
3- Cycles 
4- Technical Indicators

These will be discussed in an upcoming Market Matrix post. In short, we might be nearing a significant bottom or might have already bottomed. Therefore, one should be vigilant for potential long opportunities. If market strongly rises above 1340, it would suggest that market has already bottomed.

1 comment:

  1. OMG!!!!! Your model was right! It did bottomed on April 18th. Wow! Keep it up!
    I have one advice though. Try to refine your model further. The reason why I say that because you yourself was not sure, in this post, if April 14th's bottom was 'the' bottom your model showed. We now know that your model was pretty accurate in suggesting it was April 18th's bottom. Anyways good job!!!!!


I would love to hear from you! Please leave your comment below!!