GDOW

NYA and GDOW updates.

Hamilton

nya nov 8 2014gdow nov 8 2014

The New York Index and the Global Dow index topped out at different times, with the GDOW’s high in July and the NYA’s in early September. The differences are less than 1 single point and less than 3 points so nothing to get too excited about. But in both cases once the drop gets serious they sport very clear 5 wave moves. Unlike the DOW and the SMI no new highs have been made, in fact the GDOW has regained only about 60% so far. This is very promising for the bear case!

 

PS, Spoke to Mrs. Dee Lusion (see previous blog) this morning by phone. There are a few obstacles to the DMM’s plan to shorten the mile. This is of course top secret but apparently there are numerous complaints that car drivers will get inundated by unruly children asking “are we there yet?” This is because actual distances have not changed so it takes longer to go from a to b. Just like with the Fed., there are unintended consequences.

GDOW, Global Dow update

Hamilton

gdow b june 22 2012gdow s june 22 2012

The Global Dow should provide a nice cross section of the World’s equity markets. Abstracting from where the above charts belong in the “Big Picture”, it is fairly clear to see that since the highs of 2007 we have had three successive drops, each retraced by an a-b-c counter-trend rebound. This in and of itself would imply that the trend is still down. Each of the counter-trend rallies were a little more than 62% of the preceding drop, except the last and most recent one. So far it has retraced only about 40%, so it remains possible that the rebound could go a little higher despite yesterdays drop. In fact it is possible that the down leg is not even complete and that we are just in a 4th wave of that down leg (as labelled). We are not sure about any of this, except that the direction is still down.

Once again applying the head and shoulder concept to the charts – this is actually a very well formed specimen – it is hard to escape the conclusion that the next big move should be down regardless of whatever minute gyrations are needed before getting there. Many individual stocks are following the exact same pattern and have a similar ambiguity with regard to the last drop and rebound. RIO, Rio Tinto is just an example;

rio june 2012

GDOW

Hamilton

gdow big cgdow s circle

This is the Global DOW. It is the same chart in both pictures, but with a different emphasis. In the larger picture we have the A wave down followed by the B up. We are now in the C which should subdivide into 5, separate waves, wave 1 and 2 are (almost?) complete. The structures within the circles are essentially identical. Soon wave 3 down should start. The retracement on the rebound was about 60-70%, if we get the same proportion now this one should be as ripe as a rotting apple. Below is what the whole thing might look like once complete.

gdow bb

Fortunately there are alternatives. One would be that the B-wave is not yet complete. Another leg up to perhaps 2600 could kill a whole year but in the end the big dive would still happen. There are a number of other variations but overall the outlook is pretty dismal.

Global Dow

Hamilton

GDOW

You may want to enlarge this. I ran out of colors so there are only 17 countries and I took a good deal of artistic license putting this together so it is far from perfect. Colgate-Palmolive is not a country but it might as well have been. On average the markets, at their recent lows (not today!), were pretty well at the level of the b-wave of the a-b-c counter-trend rally that retraced an almost precise 62% of the drop of 2008/2009. Expectations now should be focused on wave 4 of previous degree at about 700. The timing would be about a year from now, a little less so perhaps July, 2012.

Colgate should break down any moment.