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.

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Posted in Finance, Markets, STA news, Technical Analysis, Trading, Trending
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One comment on “Market fragility: Are equity markets due a reaction?
  1. Anonymous says:

    Interesting report by Ron and Robin, my own conclusions are different.
    Yes, there was a lower low of the S&P 500 in Sept that has all been won back in spades.

    Using my own Synthetic TA method:
    * The latest rolling monthly growth in 200 day ema is 11%- satisfactory
    *The latest ” ” ” in 50 day ema is 13%- very satisfactory and will lead 200 higher
    The UK Allshare is far weaker and needs a fresh higher high to be investible as an index.
    Best Regards, Ben

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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