Transcript Momentum Structural Analysis (MSA)

•1993: Early warning as blow-off conditions develop
in the background. Factors predefined.
February 8, 1993
“…clear presence of a
major momentum
justification for a blow-off…
the preconditions being
delineated at this time.”
“The blow-off is a rare market
phase which is built from pent-up
frustration…(from an) inability to
reach a level which equalizes
supply/demand factors.”
“Blow-off ‘solves’ the
problem by pendulum
swing to historical
excess…”
Identifying technical preconditions is helpful, but it is
more important to identify
trigger points - the points of
action. Massive downtrend line
on quarterly momentum of Dow
(and S&P) was waiting overhead.
It would be 8 quarterly bars later
before this oscillator would break
out over this structure.
February 23, 1995
Quarterly momentum structure on
S&P 500 breaks out. (This oscillator
in point-and-figure format).
“Expect increased
volatility to now
begin, and probably
not to return for
several years.
Analysis:
•Annual momentum breaks massive
support in first days of Jan. 2000
Prior low of late 1999 also not
violated.
Before
Price chart
we
Therefore,
look
on the
at the
top
no2000
major
is in
Annual
momentum
oscillator
Major structural violation in
price
reports,
quarterly
chart
a broad-stroke
damage.
price
bars.
Price
Note:
look
chart
at
(bottom
chart)
shows
quarterly
first days of first quarter 2000.
uptrend
breakage
price
and
intact
did
momentum
not
through
occur
end
from
untilof
ranges
plotted
vs.
3-year
Unequivocal breakage!
2001,
1994
three
to
2000.
end
hundred
of 2000.
points
average.
from the high.
Momentum
provides
a
different
Momentum usually warns of
vantageprice
point
from
widelychange.
watched price charts.
“S&P annual momentum breaks
5 year uptrend”
Jan. 4, 2000
“…equal and opposite signal to
Feb. 1995 buy signal…”
“The market might for a while ignore and forget what it did
due to countervailing and more
to the
Jan.near-term
9: “Last pressures
week did damage…I,
as a
upside in miscellaneous sectors,
but I think
signal is
technician,
can’tthis
overlook
oraforgive the
solid sign that the year 2000 is likely to turnbreakage.”
out differently
from the past 5 years. It’s been ‘pre-announced’ in my
opinion.”
Analysis:
•Specifies actionable numbers
“…heightened
concern about the
health of this
trend…”
Analysis:
•Pre-defines price zone of
bear market bottom
July 20, 2002
“TheWeekend
market’s Report
obvious intent to
destroy all of its previous malinvestments
in one
fell-swoop
At time of this
report,
S&P has
shortened
clock, and
was at 850(the)
and natural
collapsing
madeinthe
likelihood
of a major low – in
slabs.
The following
this
moveit–would
all themake
greater…market
week,
its
forcesfirst
want
cleansed
lowtoatbe775,
to be totally and
in excess
now. Sobybea it.”
followed
in October
final low at 768.
All long-term momentum
trend factors were arguing for
a majorthe
low.10-yr.
And avg.
in each
For example,
oscillator
case,tracing
the indicator
provided
a
of S&P,
back decades,
argued
generalalong
level the
for that
low.of the
for support
bottom
Plus, there
waschannel.
much
massive
trend
agreement between the
various indicators.
The consensus of long-term
momentum indicators of the
S&P 500 suggested a likely
low for the bear market
“between 815 and 757.”
The final low was in October
2002 at a price of 768.
The report concluded “The
market has now put itself
into the category of years
which were major lows:
1931/1932, 1938, and 1974.”
Analysis:
• Specifies actionable number
Signal soon occurred;
Annual trend breakage
index dropped 200
specified as trade to
points in the next two
1456
weeks
Analysis:
• February 24, 2009 report specifies target low
10 days before
bottom.
Forecasted Major
Low “soon”
At time of this report,
S&Pclose
was was
at 772.
Low
676
Target
low
specified
the following
as 722 for
that week
week.
or 670 if low occurred
following week.
Analysis:
• End of 2010, S&P at 1257. Most analysts
project S&P to reach1500 in 2011.
By August,
“MSA’sS&P
technical
reached
view…issued
MSA’s bareatminimum
the
beginning
downside
objective
of this
2011,
was
of 1177,
that
at
and
some
then
some.
At time of
mid-year
report,
S&Ppoint
500 in
Only
2011 then
it wasdid
highly
Major
likely
Wall
that
St. firms
the S&P
rapidly
500
still
above
1300.
would
reviseatdownward
bare minimum
their previously
trade downpositive
to its 1year moving
projections.
average.”
In each of these major events,
the proprietary methodology of
•ANTICIPATED the massive trend changes
•PRE-DEFINED the nature and time-scale of
the changes
•SPECIFIED actionable numbers