Market fragility: Are equity markets due a reaction?
This week a familiar face at STA monthly meetings, Ron William, sent me a piece he had co-authored with Robin Griffiths FSTA. I’m sure they’ll be at our Christmas party on Tuesday 12th December so, if you have any questions or disagree with their view or methods, you can take it up with them then. (I do hope they read this blog and come forewarned.)
Written for Halkin Services, an international risk analysis and asset allocation firm, it looks to be the first in a series called ‘Trends, Timing & Tactics’ or T to the power of three for short. Their focus is the US S&P 500 index and two separate equity charts: those of Facebook and IBM; Tech school versus old school perhaps?
They find that the S&P 500 is increasingly fragile as it hits an 8-year trend resistance and is historically overbought. Downside risk levels can be found 2440-50, which is where the 200-day moving average lies. Their prediction is that there should be a three-wave fall into the new year, as per cycle studies. The fall should reverse all of 2017’s gains.
Click here to read the full report.
Tags: cycles, Elliott Wave, Gann
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