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Monday, 30 January 2017

The Trump Crash (S&P 500)

S&P 500  to crash from 2277 to 1600, or even 1300?

It may seem unbelievable, but this would be a drop in P/E from the excessively high level of 25.5 down to its median level of 14.65.

Trump's economic policy, negative on trade, is likely to see a contraction in GDP rather than a rise.

Tomorrow is the first of February, so we can expect to see prices falling now that we are out of January.

Friday, 27 January 2017

Ali Baba uptrend defined

The pink trend lines are my original depiction of the uptrend.

The green arrow shows my original prediction of an upswing.

The pink oval area shows how the graph dropped further than I envisaged, with the consequent redrawing of the trend lines (blue) and the blue arrow showing my revised prediction of the upswing.

The graph bounced off my blue Resistance Line and is fairly likely to swing down and up following the red arrow.

The trend is upwards anyway. There is a possibility that the graph will not go all the way down to the blue Support Line, but resume the original steeper upslope. Hesitant for the moment, my long-term view is long.

Wednesday, 18 January 2017

DOW and American Indexes to plunge

The chart shows the Dow Industrial Index to be at a peak.

Wall Street Journal gives the P/E of Dow Industrials (Current price over earnings for 2016) at 21.44. Nasdaq and S&P are even more extended, at 25, and Dow Utility at 28.

Meanwhile DAX (German Index) is around 18.

Pressure will now be on the American indexes to plunge towards a P/E of 18 (but based on estimated earnings for 2017). Expectations of a sudden massive surge in American GDP/ return on shares, as a result of Trump economics, are fantasy. There will be a plunge towards $13,000 for Dow Industrial Index.