Armstrong Economics believes tomorrow is an important day for the markets. I believe Socrates is on to something. The closing on the Dow for the end of August will determine our path for the next few months.
Here’s an article from Armstrong Economics regarding the importance of the monthly closing price for August. It came out last Wednesday, August 26th.
Dow Today (August 26, 2015) & the Three-Day Bounce
If you examine some of the statements we notice the following. The markets bounced into Thursday. The markets could not follow through on Friday. And the markets actually closed higher this week compared to the previous bloody week. This is exactly what Marty and Socrates said would happen.
What of this week? I will quote Marty.
If we break (the low) and close August at least BELOW 15961, then this will open the door to a five-month correction into October with a maximum decline of about 5000 points from the May high, taking us down into the 12000 zone. Key support will also lie at the 13900 area.
An August closing BELOW 15550 would point to a correction into October.
A closing on Monday ABOVE 17069 will suggest that we may have a low in place. A closing BELOW 16899 will warn that we should retest the lows before proceeding any higher. A closing BELOW the Monthly Bearish at 15550 would warn, of a potential March 2016 low with still the swing to new highs as early as 2017/2018.
I know many people believe markets can not be forecasted accurately. I agree on the short term, on the long term not so much. I have followed Marty and Socrates for about five years now. Their record is impeccable. Socrates forecasted the market would drop 1000 points two Friday’s ago. That is what happened. Socrates is showing the trend to be down for this week. I believe Socrates. I have bought some September puts with the belief we will retest the lows this week. I plan to cover Thursday or Friday of this week.
Luckily, Socrates will be available to individual investors at the end of September. I will be signing up, no question in my mind.
I doubt many people are prepared for a prolonged correction or increased turbulence. They will sell exactly at the worst, right before the turn goes strongly higher. I have learned from Marty that the majority have to be wrong at key turning points. They are the fuel to push the market the opposite way.
Given there is a chance of a longer, deeper correction, I take it seriously. We’ll find out tomorrow. In my mind, people are too bullish and complacent the market will recover strongly, especially folks on TV and in th media.
Fingers crossed tomorrow. Good luck to everyone! I hope to have some book reviews and non-finance blogs soon.
Vijay @ smilingdad
Image from Armstrong Economics