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Duarte

Why S&P 500 will be much higher in 5 years?

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I'll try to explain why the S&P 500 will be much higher in 5 years.

(It's a guess, not a certainty.)

 

Chart 1 - S & P500 index monthly candlestick chart between March 1964 and January 2013.

 

My guess about what is happening is that the S & P 500 since 2000 is following the path between 1968 and 1983.

This suggests that the S&P 500 may rise in the long term.

 

IhynT.png

 

 

Chart 2 - The following chart shows the Price ROC indicator between March 1964 and January 2013.

 

cLLI2.png

 

The triple bottom pattern that the indicator did in 1994 was repeated between 2011 and 2012.

After the triple bottom pattern in 1994, the S&P 500 rose during 5 years.

This also suggests that the S&P 500 may rise in the long term.

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I'll try to explain why the markets will be much higher in 5 years.

(It's a guess, not a certainty.)

 

 

Chart 1 - S & P500 index monthly candlestick chart between March 1964 and January 2013.

 

IhynT.png

 

My guess about what is happening is that the S & P 500 since 2000 is following the path between 1968 and 1983.

This suggests a period up for several years for stocks.

 

 

 

 

Chart 2 - The following chart shows the Price ROC indicator between March 1964 and January 2013.

 

cLLI2.png

 

 

The pattern that the indicator did in 1994 was repeated between 2011 and 2012.

After the indicator having had the pattern in 1994 the market has been up for 5 years.

This also suggests a period up for several years for stocks.

 

Why not ?!

 

I participate anyway!

 

But boom years , are easymony ;)

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Interesting analysis ... but what do you think about the technology and market environment changes since? With HFT and huge hedge funds and the extreme leverage being used, I tend to think we will see more big swings ... volatile ups and downs. However, I do think the next few years will be good for the markets.

 

MMS

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now how in the sam hell is the market ...say the ES...gonna be higher in 5 years since we won't begin to get out of this recession/depression/cliff until around 2018? helicopter ben will continue scattering $$$ around and of course that will prop things up for a while but you know sooner or later all bubbles pop. the next big bubble is well you know the $$$ aka as the greenback. when it pops the cow manure will hit the fan.

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After a long term analysis made, I will adopt a passive strategy of buy and hold.

For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,

I will use more 10 000 dollars.

 

I'll do this for each of the following risk profiles /ETFs:

 

Higher Risk / UPRO

Medium-higher Risk /SSO

Medium Risk / SPY

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After a long term analysis made, I will adopt a passive strategy of buy and hold.

For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,

I will use more 10 000 dollars.

 

I'll do this for each of the following risk profiles /ETFs:

 

Higher Risk / UPRO

Medium-higher Risk /SSO

Medium Risk / SPY

 

About the risk:

 

The risk varies according to the leverage of the ETF used.

 

SPY is not leveraged. SPY is designed to have the same gain or loss as the S&P 500.

SSO is 2x leveraged. SSO is designed to have twice the gain or loss as the S&P 500 index.

UPRO is 3x leveraged. UPRO is designed to have thrice the gain or loss as the S&P 500 index

Edited by Duarte

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Interesting analysis ... but what do you think about the technology and market environment changes since? With HFT and huge hedge funds and the extreme leverage being used, I tend to think we will see more big swings ... volatile ups and downs. However, I do think the next few years will be good for the markets.

 

MMS

 

Thanks. As regards the issue of technology and market environment changes, this is a difficult question, I stil think that the long term movements will continue similar to the past.

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I sincerely hope you are right and you do make a fairly convincing TA argument, but the fundamentals are a tough pill to swallow. We have the overhanging debt that is going to eat away at the little economic recovery we've been able to muster as of late. The S&P downgrade of the US credit rating to AA was a bad blow in itself, but now there is talk of more credit agencies doing the same.

It is well agreed by many analysts that the fiscal agreement was premature and does not represent a solution to the long-term problem. But they really had no choice given that the impending tax cuts and spending increases were so close and would have led to a double dip recession if the U.S. government failed to act.

The only thing that can really rescue this economy is if Clinton is indeed right and that the Obama policies do take effect as we move further into his 2nd term in office.

There is also a chance of another tech boom on the scale of the one in 90s driving the U.S. economy to new heights; we had a miniature one recently but it's sufficient.

There is a part of me that feels as if the U.S. is taking a step back to move two steps forward because the economy is definitely adjusting to the changes that are taking place across the globe. We need to let the bad jobs go (to China, India wherever) as Obama said and embrace the change to a knowledge economy with high tech manufacturing here in the U.S.

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My guess is that the S&P 500 will rise to its resistance line, close to the level of 1575.

 

Chart - S & P500 index monthly candlestick chart between May 1999 and March 2013.

 

df94gwF.png

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After a long term analysis made, I will adopt a passive strategy of buy and hold.

For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,

I will use more 10 000 dollars.

 

I'll do this for each of the following risk profiles /ETFs:

 

Higher Risk / UPRO

Medium-higher Risk /SSO

Medium Risk / SPY

 

In the first months of this year, the evolution of “buy and hold” portfolios was positive.

 

8wMgfuh.png

 

 

6kXtgni.png

 

 

6OOiHeU.png

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I compared the previous period with the current period, and I came to the conclusion that the S&P500 after reaches its resistance line (key value: 1575) can follow the path 1 or 2, in the first chart.

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Why S&P 500 will be much higher in 5 years?

Simple Answer: Cause of Inflation Adjustment...Inflation is only going to go higher in the long term (by long term i mean decade or decades) cause of increase in population, increase in crime, increase in gold,oil,commodities prices...there will be correction and even market crashes in the way bt overall trajectory over long term is only up...

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I compared the previous period with the current period, and I came to the conclusion that the S&P500 after reaches its resistance line (key value: 1575) can follow the path 1 or 2, in the first chart.

 

The two paths described remain open as long as the S&P 500 remains below to 1625.

 

If, over the next two months, the S&P 500 remains below to 1575, I think that the S&P 500 will follow the path 1, but if the S&P500 rises above 1625, I think that the S&P 500 will follow the path 2.

 

I will continue to evaluate on a monthly basis to determine the need to change the initial plan.

 

 

79Eypd2.png

 

zEMUWpx.png

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It wont be long now and the doo doo will hit the fan...

 

What is doo doo? 700 points? 900 points?

 

Is it 60-150 points?

 

The market needs much greater retail representation in order to have a drop that we can call doo doo; otherwise, it is just a fart in the wind.

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Below are the charts along with brief commentary.

 

The following two monthly charts give a long-term perspective for the S&P 500.

 

I am going to look again closely for the period between 1967 and 1984, as well as, for the period between 2000 and 2013.

In December 1980, the S&P 500 closed above to its resistance line and then fell for 20 months. For that reason, even if the index closes above to its resistance line, the fall will remain possible. On the other hand, if the index rises above 1625 (above 3,17% of its resistance line), it is more likely to go up rather than down.

At this time, the two paths remain open but the very bearish sentiment supports the continuation of the rise.

Let's see what happens. This month and next month will be very important to trace the path for long term.

 

T4ZOzz5.png

 

eYzINOX.png

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