At the time of writing (17th November 2017), the
Dow is at an all time high. While I might not have identified that in my
forecasts ( although I did predict the gas being put back in the Nasdaq), I did
not predict a crash in 2010-15 either unlike so many other astrological
commentators. It must be said that getting it right relied on sticking with the
chart. It is a strong chart and just when you
might think it would suffer it does the opposite and booms.
However, nothing is forever and there are certainly patches
over the next 4 years which are challenging.
What was surprising about the 2016 result was the fact that
there is an ever present feeling of “this must be the top” which seems to have
been dismissed due to more dramatic factors.
2017
This mixed position is going to persist throughout 2017 and
the only constant theme is one of trading glitches.
By January we see a return to some of the challenges of May
2016 time.
However there are still unexpectedly bullish factors at work
despite the feeling of nervous anticipation. There are also some stabilising
factors at play though, which might supress the tendency to break out again.
Perhaps volatility is all we cam expect between January and March
April and May, however, could start to show a new pattern.
There is a feeling that the foundations of the market don’t justify valuations.
But there is uncertainty as to where to find the true value.
Volatility doesn’t therefore go away and the market hovers
around a peak.
This picture continues into June, July and August. There is
a lack of direction and minor fluctuations.
I’d guess we’re in for one last boost to valuations before a
new cycle begins.
September looks like a holding pattern. There is a lack of big investment, and a
focus on small transactions- perhaps again suggesting glitches.
October and November see this under control and very little
direction.
December sees the next shift in gear. Consolidation of
position is the name of the game and this might lead to some unexpected swings
and announcements but not to a significant change in the overall level.
2018 is a key year for the market when man of its core
assumptions that relate to the nature, purpose and composition of the index are
to the fore.
Hints of the themes
of January to March 2018 were seen around May 2017. There is a definite feeling
that the bull market might be reaching its end and there is more consolidation
of positions. However I don’t see falls at this point, there is still a belief
in the underlying stocks. This might lead to more surprise trades.
Underlying difficulties can’t be ruled out though. Questions
may be raised over some Dow components.
The theme is an ongoing one and April to June sees more of
the same, but now we have a shift globally in mood from active buying to
management of the accumulated investment. As a result there may be more
challenges to the bulls. I’d probably avoid buying now, though it is not all
doom and gloom and selling.
It just feels like the market loses its way a little over
the summer.
July to September see another look at those fundamentals and
without the frenzied buying of previous periods there could be a fall in values
now.
October is more of the same, though there is perhaps a small
boost from inflationary conditions.
November and December have more drama, with some shocks and
surprises.
There are still questions regarding fundamental values but
there looks like a upward move before the year end.
2019
January sees a long term shift which mirrors the one from
1899 to 1937, it appears that the construction of the index may undergo lots of
changes, or perhaps it is the trading platforms that will change.
In any case it looks like there is relief from any value
pressures around this time.
However the difficulties have not gone away and are
magnified in February through to May. Despite the fact that there may be
positive news in some areas, I was expect the overall trend to be down and
really quite depressive.
In June to October 2018 we once again have a let up. There
is enough support to prevent big falls and enough uncertainty over direction
for there to be bullish sentiments again.
Expect volatility but overall not much direction.
November is a month when the market conditions will be on
everyone’s tongue.
However, there will be so much adjustment and disjointed
thinking that we can’t really expect much trend.
December isn’t much better when it comes to knowing where to
invest next and caution is likely to be the watchword. There is yet more talk
in the street about the components and the future trading.
2020
Where the **** do we go from here, investors are asking. It
looks like there may be real problems to overcome in the first 2 moths.
March through to July sees constant work to ensure that the
index does not become unmanageable.
I’d expect some falls but mainly just lack of direction.
August to October is more interesting. The balance of opinion
is that is an index that needs more re-formulating. Values are likely to suffer
from this criticism
And then we reach November. The index moves into a
completely new territory – it has never looked like this in all the years since
formation.
A total revamp is in process.
December 2020 is much the same, and values are depressed as
people try to work out where the market will go next.
Comments