Goldtent TA Paradise

MegaPhone Research

1. pedro_deleon says:

   January 18, 2016 - 10:57 am at 10:57 am

   There’s something called the Hindenburg Omen out there. McFoo is one of the guys who tracks them closely.
   But they can be like those economists that called 9 of the last three recessions.
   That said, what Hindy’s measure is the tendency in the markets on occasion — for a large number of individual issues to be making new highs, at the same time that a large number of issues are also making new lows. Internal market schizophrenia. And these signify impending trouble. On occasion they work, although I don’t recall seeing much chatter about Hindys within the last six months or so. Hindy’s are measured using the NYSE, which includes a fair share of credit market instruments, so that may be the reason it works now and then.
   And of course, but only over time, megaphone patterns display the market aggregates making both new highs and new lows in succession. Ie, intertemporal market schizophrenia.
   Bottom line …. I can see grounds for a theory here.

   • Surf City says:

     January 18, 2016 - 12:25 pm at 12:25 pm

     Yes I do think the previous MP patterns from 1918-1932 and 1966-1974 merit more work, especially from Elliott Wave analysts. Again, everyone thinks the last two Secular Bears started with the crashes in 1929 and 1972 but I am starting to think they actually started earlier with an EW megaphone from my dates above. Both show an A,B,C,D,E corrective move from the primary Grand SuperCycle up, followed by a Primary Wave 1 up out of the Lows in 1932 and 1974.

     I have posted on a couple of EW sites this weekend (e.g. Caldaro) and just get a yawn. The pattern is so rare they prefer to ignore it I guess. I would like to see someone in the EW community take a serious look at the longer SuperCycle wave, specifically at these two periods from 1918-1932 and 1966-1974 and examine the potential for a long running A,B,C,D,E correction.

2. pedro_deleon says:

   January 18, 2016 - 1:50 pm at 1:50 pm

   “Both show an A,B,C,D,E corrective move from the primary Grand SuperCycle up, followed by a Primary Wave 1 up out of the Lows in 1932 and 1974.”

   And this raises ANOTHER question. Should timing systems be tested against their ability to deliver REAL returns?
   If you had bought the Dow in 1974, you would have realized NEGATIVE real returns over the subsequent decade or so given double digit inflation.
   Far better returns were available in CRB during that decade. And a good system should have told you that.
   I don’t think its usually much of an issue … certainly not for short term work. And usually not even for LT except during high inflation years.
   ZH has been looking at Caracas’ performance, which leads the world until you adjust it using market driven exchange rates.

   Turning back to 1929 to 32, is it your view then that folks need to consider whether 1929 was a D wave top and 32 the E wave low?

   • Surf City says:

     January 18, 2016 - 2:42 pm at 2:42 pm

     Pedro,

     Your question: “Turning back to 1929 to 32, is it your view then that folks need to consider whether 1929 was a D wave top and 32 the E wave low?”

     Correct, I see almost identical A-E wave patterns in both the 1918 to 1932 and the 1966-1974 periods. My thinking here is that these were the actual Secular Bear periods where after a Primary 5 wave top, we went into a decade + period of a Megaphone A,B.C,D,E wave correction. 1932 and 1974 would have started a new Wave 1 up in line with the greater Grand SuperCycle.

   • Surf City says:

     January 18, 2016 - 2:51 pm at 2:51 pm

     Specifically both 1932 and 1974 would appear to be Wave E bottoms of the Megaphone A-E correction.

3. DaveintheUK says:

   January 18, 2016 - 3:19 pm at 3:19 pm

   My favourite by far is the megaphone in the Dow to Gold ratio. Now that is the biggie, in force since 1929, so 87 years in the making. Lower line comes in at about 0.7 on the log chart if it is reached and breakdown target would be unmentionable but very near to zero.

   • DaveintheUK says:

     January 18, 2016 - 3:27 pm at 3:27 pm

     I have been looking at scenarios to tie in the Dow megaphone to the Dow:Gold megaphone based on their cycle length but I cant’ quite tie them in in terms of timing.

     Dow goes to lower line at 6000, Dow breaks down from megaphone to 2000 measured target (approx).
     Dow:gold goes to lower line at 0.7:1 (or 1:1 if you are conservative). Breaks down to 0.012:1 on hyperinflation. The Dow:Gold couldn’t go that low except on a default in everything or a hyperinflation as per Germany 1922-23.

     That is the uber-bear scenario. I thought that this must happen eventually but now I feel the central bankers can manipulate the system to prevent it somehow, just stage by stage. They can change any law they want.

     The ultimate bitch scenario for goldbugs would be for the Dow to crash, the Dow:Gold ratio to go to 1:1 WITHOUT GOLD MAKING A NEW HIGH in US dollar price! I kind of fancy this option myself right now.

4. DaveintheUK says:

   January 18, 2016 - 3:46 pm at 3:46 pm

   Of more interest to me from fundamental point of view are Dow:Gold ratio – the main event!

   http://1000gold.blogspot.co.uk/2008/04/chart-hints-at-financial-disintegration.html

   http://1000gold.blogspot.co.uk/2008/06/megaphone-top-in-dowgold-ratio-2008-06.html

   http://1000gold.blogspot.co.uk/2008/06/mega-move-from-dowgold-megaphone-2008.html

   The secondary event – megaphones in the Dow, etc:

   http://1000gold.blogspot.co.uk/2009/09/sp500-and-dow-jones-megaphone-charts.html

   http://1000gold.blogspot.co.uk/2015/09/dow-gaps-down-through-its-megaphone-top.html

5. DaveintheUK says:

   January 18, 2016 - 3:57 pm at 3:57 pm

   Also theoretical musing and calculation from Germany 1913-1923:

   http://1000gold.blogspot.co.uk/2013/10/could-dowgold-ratio-go-close-to-zero.html

   • Surf City says:

     January 18, 2016 - 7:18 pm at 7:18 pm

     Good stuff Dave, Thanks for the feedback.