September 2010 now over, was anything like the expected seasonal and statistical worst month of the year for traders and investors.
Moreover, most global equity indices during September posted very significant gains after the summer sell-off. This included the bellwether USA SP500 equity index ending up just over 90 points, or a whopping 8.7% in a single month. Not too shabby for the so-called expected worst seasonal month of the year.
Now with the benefit of hindsight, our KRTT and BBTL blog forecasts as recorded here, of the upward September trend was spot - on.
Who said markets cannot be timed successfully? KRTT was one of the rare accurate financial market advisory services that remained bullish all month. It begs one to ask the question; what is KRTT doing beyond the conventional wisdom of Bay and Wall Street for such accuracy or was it mere luck?. (hint read our pages)
But, now what? Where is October going to go for equities?
October, like the month of September also has very bearish connotations, both seasonally and statistically. We all know that market crashes (1987, 2000 and 2008) have initiated or even accelerated down during the month of October.
Many so-called financial gurus, are now claiming and explaining in hindsight that it was just end-of-quarter September institutional manager equity window-dressing, and considerable selective buying, in an attempt to salvage the formerly bad up-and-down equity year to date.
Others, are busy implying and suggesting that the bears of September who came up with big losses by being short, are now likely to bet even bigger on a down October.
As KRTT teaches our core foundational education, none of these gossip or media spun viewpoints that distract from the real market truth, is meaningful or relevant.
As we teach and educate, financial markets move via trends and cycles in accordance with Natural Law.
Not only was KRTT spot-on correct about the equity index direction in September 2010, just this weekend in our last two blog posts, we have provided readers considerable more proof of our future accuracy by writing up two more financial buy-side examples.
These and other ongoing BBTL blog posts will soon demonstrate the incredible power of combining our KRTT proprietary methodologies about emerging Natural Law Science relating to exact predictable trends and cycles, with our advanced technical analysis skills.
That stated, no good analyst should ever rely on past track record, or even worse, a huge ego. There are absolutely no 100% guarantees in the financial markets. In contrast, financial markets are indeed highly dynamic, and new information must be assessed and included daily. We describe this ability of man to upset more powerful natural cycles as - man-made upset mechanism. In essence, both are at work in the financial markets.
This implies that one of the greatest traits of a savvy investor or a professional trader is keeping an open mind that can change in an instant as new convincing data or evidence surfaces suggesting change is imminent. These new trend changes can be mathematically monitored far easier than anyone on Bay or Wall Street reveals, since sadly, they too are usually in the dark and have no vested interest other than their own.
By example of an open mind, traders and investors should thus develop and have ready a plan of action, in circumstances when things do not work out as expected. Some professional traders by example use preset stop losses.
For instance, KRTT has advertised for some time now, that the SP500 index is in a bullish Elliott Wave (EW) Five up trend. This KRTT wave count immediately suggest that KRTT also expects October, like September, will generally make even more progress in the same upward trend direction as September.
Also, given our minor EW count within the bullish up trend, it has not yet shown any sign of being fully developed or terminating. So for now, as we have stated before - KRTT is decidedly bullish.
However looking closer, even powerful weekly data charts of stock indices are showing some signs of being overbought by indicators.
Also, last week the SP500 trend flattened near a key Fibonacci price level and showed some signs of being tired in the bull run. Then, just Friday, the last trading day of the week, the end-of-day (EOD) NYSE TICK index was very close to being neutral. So, what does this mean?
This implies, as we go into the first full trading week of October, beginning Monday October 04, 2010, things must be closely monitored early in the week, for any bearish change.
On the other far more bullish hand, any strong rally day early in the week, or upward thrust at this point, would quickly renew the new highs, and fully invigorate our current KRTT bullish outlook.
So, all in all, what we are attempting to teach herein, is that although so far the first day of October was a potent up day, especially in USA financial stocks like Citigroup (see or recent blog feature on Citigroup) we must now carefully watch the first few days in October for more evidence of a continuing up trend.
In line, with our open mind policy, we are thus also showing you (in the SP500 chart below) why many Elliott Wave bears are now so convinced that October 2010 will become a down month.
On that chart we have posted a bearish ABC Elliott Wave count (in orange ABC letters). Note that this alternate or secondary EW count, as a far more bearish EW viewpoint, is very close to the termination of potential Wave C, and this itself implies to the bears the markets will impulse down. This we note is NOT our view.
However, even we agree that there is some validity in this more bearish EW count, and those with recent index trading profits from September would be smart to tighten their stops - especially if they agree with this bearish EW count.
However for now, we again strongly advise that this bearish count in Orange is not our primary EW count. Again, the KRTT view is that we are in a more bullish Elliott Wave Five in progress, in an upward direction.
We will update the blog again as the trading week progresses, or provides us new information. For now, the evidence and path of least resistance is up in our view. Chart the trend, spot the trend, and go with it.
We have included two charts relating to the general index outlook below with our usual mark-up comments.
PS - If you enjoy our blog please follow (Google connect) it and feel free to comment on our posts. Also, if enough interest is shown over time in the attached pages, we will also add more valuable educational content.
Sincerely,
James Kelly Sr.
Editor in Chief
www.KRTT.com
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