Beware the Ides of March

By: Gordon Long | Fri, Feb 1, 2013
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Updated from the January 2013 Trigger$ Edition


 

Wondering when this delusional rally will end? Where is the top and when will it be in?

There is one technical topping tool that has proven very effective in answering this question with a fair degree of accuracy. It is the application of the uncommonly used Fibonacci Ellipse.

In last month's Trigger$ we predicted the January rally within what we believed to be the controlling Fibonacci Ellipse. Now we need to view what that Fibonacci Ellipses is telling us regarding what is ahead.

We are very close to a short term top, but we are not quite there yet. Traders need to understand that this short term top is not the Intermediate / Long Term top we have been calling for and still expect it to occur in the proximity of the March 15th Quadruple witch. Beware the Ides of March.


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Our Macro Driver$ in this month's Trigger$ shows the Global ECO's are following a very clear cyclical pattern (illustration to the right), resonating from coordinated central bank actions.

Citigroup Economic Surprise Index has moved below zero. On the past 7 occasions when this happened the near-term equity upside was capped. The average maximum upside of 1% and average drawdown of 8% seen over the following 3 months demonstrate the asymmetric risk-reward.

We fully expect a near term scare in interest rates to ignite a correction but it will stay within our controlling ellipse before rising to a final top.


Fibonacci Spirals


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A Major Long Term Right Shoulder Formation Pattern


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Fibonacci Time Extensions

Our original timing predictions (shown below) were based on our Fibonacci Time Extensions. This is a separate analysis from Fibonacci Ellipses but must 'plug' or we fail the test of symmetry which chaos and fractal theory dictate. We have a a very tight correlation that in turn matches fibonacci clusters and Bradley turn cycle dates.


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The 18 Month View


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Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
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