We got the advance that I was looking for into today’s new moon, taking us a little more overbought and overbullish, plus Tom DeMark also fairly well aligned: his call yesterday was to exit Europe longs and that the SP500 should top by 1492 possibly as early as today – for a subsequent 5% decline. My forecast based on solar/secular history for world equities looked like this in Sept 2012, namely a breakout from the secular bear pentagon into 2013 and a final but mild and short-lived cyclical bear 2013-14 before secular bull momentum erupts:
A breakout indeed, and drawing together the models of the previous post, I predict a higher high (and cyclical bull topping high) by around June 2013, but on negative divergences, before a cyclical bear in H2 2013 into early 2014 takes us back to the pentagon angle level roughly. All subject to developments of course.
So I took 40% stock indices longs profits today, but I retain all the different country stock indices that I listed to some degree. I don’t believe this is the cyclical top, but that stocks should in due course pull back, advance again to a new marginal high on weaker internals and that the whole H1 2013 will be a topping process in hindsight. Therefore if stocks do make the anticipated pullback I may add again for a final push up. If stocks continue upwards some way further I shall ride the remaining positions. But the main focus is now to see if commodities can start to outperform equities, as my weighting is now much more skewed towards them, playing for a secular finale of parabolic fashion, expecting that outperformance versus equities as of now, born out of current excessive pessimism in various softs and precious metals.
Have a great weekend all. I now in the Kota Kinabalu region of Borneo for a few days.