The high of the 2009 bull market was on 9/18/13.
The
standard time spans tell us not to expect the end of the new
bear market for almost a year – or longer. Seattle Technical Advisors provides technical analysis of
Between now and then, SeattleTA will be showing the the equity, fixed-income, commodity, and currency
new Hybrid-Lindsay model to time short-term highs and
lows. A low to the sell-off from 9/18/13 is expected markets for RIAs, Hedge Funds, Money Managers, and
today and the high of the ensuing rally is expected next
week on 10/14-15. After that high, we see no low until Financial Advisors.
the US Thanksgiving holiday in late November.
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1921-1942 Long Cycle. Now available at [Link] or
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Lindsay Analysis
Seattle Technical Advisors
The leading authority in Lindsay Market Analysis
Special Report
October 7, 2013
Ed Carlson ed@[Link]
Lindsay Analysis October 7, 2013
Hybrid Lindsay Model
Forecasting lows, using either the hybrid or orthodox
Lindsay model, is done with the high of the final basic
cycle in the previous long cycle as the turning point.
The end of the terminal decline of the last long-cycle
was on 3/6/09. That would make the high on
10/11/07 the high of the final basic cycle during that
long cycle. 10/11/07 is 2,185 days prior to last Friday.
Looking for a Middle Section approximately
equidistant prior to 10/11/07 takes our search to
October 2001 and a flattened top is found then.
While a forecast from the high of the highest top
(10/26/01) has already passed (9/25/13), using
another high in the top was common for Lindsay.
There are two obvious choices; 10/11/01 and
10/17/01.
10/11/01 forecasts a low on 10/10/13 and 10/17/01
forecasts a low on 10/4/13 (upper chart). Last Friday
was clearly not a low so does that mean the current
decline will last until this Thursday, 10/10/13?
[Link] Page 1
Lindsay Analysis October 7, 2013
Hybrid Lindsay Model
Middle Section Chains
My hybrid approach can be off by a day or
two but is composed of more than just
Middle Section counts. The Hybrid-Lindsay
model attempts to constrict the margin of
error in Middle Section forecasts by using,
what Lindsay would have called, intervals of
equidistance; similar to cycles but without
the requirement of extending from low to
low. I have identified a 66-day interval
pointing to a low today (one trading day past
the Middle Section forecast) and the next
interval forecast isn’t until 10/14/13. I believe
today, 10/7/13, is the best point-forecast for
a temporary low but allow for a margin of
error of 1-2 days.
[Link] Page 2
Lindsay Analysis October 7, 2013
Hybrid Lindsay Model
The rally following the expected low on 10/7/13 isn’t
expected to last long as the next high forecast by the
Hybrid Lindsay model is expected near 10/14/13.
Forecasting highs is done using the low of the basic
cycle as the turning point. The low of the current
basic cycle was on 10/4/11.
We are now almost exactly 2 years past the low of
the basic cycle. Searching for a Middle Section an
equidistance prior to 10/4/11 directs our search to
September/October 2009 and a flattened top is
found in this time period.
The high of the flattened top is our default measuring
point but, as we’ve seen, point E can be any of the
highs in the flattened top or the correct measuring
point can be point C (the day the index breaks down
below the minor top formation).
Counting from the secondary high on 9/29/09 would
make for a one-day rally as it forecasts a high on
10/8/13. Counting from point C on 10/1/09 places the
high before today’s low.
The high of the flattened top, on 9/23/09, counts 741
to the low of the basic cycle on 10/4/11. Counting
forward another 741 days forecasts a high on
10/14/13.
[Link] Page 3
Lindsay Analysis October 7, 2013
Hybrid Lindsay
Model
Middle Section Chains
A 28-day interval pointing to 10/15/13
comes close to matching the Middle
Section forecast for a high on 10/14/13.
The 73-day interval hasn’t been in effect
long enough to be dependable but is of
interest given the importance of the
previous two highs.
[Link] Page 4
Lindsay Analysis October 7, 2013
Seasonality
Long Cycles
So where does the market go to from an
expected high on 10/14/13? The fact is
that no Middle Section pointing to a low,
prior to the Middle Section on page 3,
has been identified before July/August
2001 (page 6). That Middle Section
points to no low before the end of
November!
The seasonal chart to the left includes all
13 post-election years in Lindsay’s two
previous secular bear/long cycles (1921-
1942 and 1962-1982) as well as 2005
and 2009.
It too points to a low in November just in
time for the typical year-end rally.
[Link] Page 5
Lindsay Analysis October 7, 2013
Long term intervals
12year interval
Lindsay used his 12y interval to forecast an
important low in the period 12y, 2m to 12y, 8m
from an important high.
The most recent 12y interval originates at the
high on 5/21/01. It forecasts a low in the time
period 7/21/13-1/21/14.
The high in the Dow on 9/18/13 is presumed to
be the high of the 2009 bull market. Counting the
first basic decline from then, and using the full
extent of the 12y interval on 1/21/14 is only 125
days and far too short for even a sub-normal
basic decline. Clearly, any low during this 12y
interval forecast will not be the end of the basic
decline and therefore will not be the end of the
new bear market.
[Link] Page 6
