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

[Duarte 10]

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.

 

 

 

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

 

 

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.

[PrymeTyme 10]

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.

 

 

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.

 

 

 

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

[MadMarketScientist 11]

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

[Patuca 13]

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.

[SIUYA 11]

anyone got a chart of Japan circa 1980-2000?

[Duarte 10]

anyone got a chart of Japan circa 1980-2000?

 

Nikkei monthly chart

 

[Duarte 10]

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

[Duarte 10]

 

 

 

 

[Duarte 10]

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 January 10, 2013 by Duarte

[Duarte 10]

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.

[Vinayak 10]

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.

[Duarte 10]

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.

 

[Duarte 10]

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.

 

 

 

 

 

[Duarte 10]

Now, I am going to look again closely for the period between January 1968 and January 1985, as well as, for the period between November 1999 and March 2013.

 

 

[Duarte 10]

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.

[Ammeo 10]

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...

[Duarte 10]

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.

 

 

 

[Duarte 10]

See here the buy and hold portfolios update:

 

 

Edited April 6, 2013 by Duarte

[Patuca 13]

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

[MightyMouse 12]

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.

[Duarte 10]

The following are the long-term market timer portfolios.

 

 

 

[Duarte 10]

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.

 

 

[Duarte 10]

The following is the portfolio:

(The chart is updated on a monthly basis.)

 

 

[Duarte 10]

The following is the portfolio:

(The chart is updated on a monthly basis.)

 

 

[Duarte 10]

The following is the portfolio:

(The chart is updated on a monthly basis.)