I believe freely traded markets are like chaotic
systems and , just like the weather, they are not predictable with a high degree
of accuracy, more than 3 or 4 days in the future.
Obviously there are economic cycles with generally
fixed periods that influence market direction however the relevant periods are
best measured in weeks or months with error distributions that make them poor
trade decision tools, at least from my perspective.
When I offer an opinion on this forum it is based
on tools with reliability ratings based on hundreds if not thousands of cases
over extended periods of time. Forecasts based on small sample sets are , in my
mind, just guesses and not advised for trading decisions. Calculations showing
correlation of events are meaningless unless backed up by a statically
significant sample size. Fibonacci calculations, for example, have been shown to
be unreliable when considering large sample sets.
Also, there should be a stated methodology behind
the calculations that explains why they are relevant.
All that being said, I offer the following about
the coming week.
After three days of trend change warnings and a
Near Impulse Date of 10/14 for all, the stock indexes reversed on Friday
although only the NASDAQ and Russell closed below Thursday lows, confirming the
reversal. Generally we can expect a three - four day persistence in trend
following the reversal. For Monday I generated 36 sell signals for the NAZ
100 and only 6 buy signals supporting expectations of a lower low.My next Near
Impulse date shared by all indexes is 10/27 so we may expect a
downward continuation until then. We shall see.
Jim White
Pivot Research & Trading
Co.
PivotTrader.com
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