One year ago, on March 19th of 2017, the story of DeLorean had a beginning, after many years of research. Using time waves predictions had been made for the first time to forecast the opening of future trading days- for ALL trading days at once- from March 20th until the beginning of May with regard to DAX and SPX.
The trend for a trading day Could be UP, DOWN or neutral (=not available). Obviously to take advantage of this prediction traders had to buy or sell the day before. This has been documented and sent to a selective group of traders.
Beginning of April 2017 we contacted Tradersworld to sent research along with predictions and wrote the first article for Tradersworld.
Beginning of May it seemed that the outcome was very significant with a hit ratio of around 75-80%, healthy profits and no drawdown on a monthly basis. Still, it could have been a only good period. Now, after one year of predictions, it is clear that our time waves and cycles, which are fractal in nature do work quite well. Below the results for DeLorean predicting the opening trend of the next day one month ahead:
Exciting new research
Every time we come across very interesting, expected and sometimes unexpected fluctuations in the indices we predict and research, we grab our magnifying glass to look for explanations.
Consequently we will need to research our fractal time waves, cycles and time patterns to determine if history can shed light upon up and down trends in the markets, especially when it comes as a surprise. In order to gain more knowledge we therefore search our database to develop and show better information in our indicators.
Quite surprisingly this approach has led to new discoveries that improved our predictions considerably. A bit unexpected, because at launch of DeLorean it was already good, but mining the treasure of information below the surface has proven to be very worthwhile. By matching events with patterns and correlating price fluctuations statistically, we could clearly see its significance.
This led to earlier mentioned innovations like “Rebound”, new MAPS indicator (ASPtrig), which resulted in a more detailed 24/7 leading indicator of price trends. The latter indicator opened the way for other applications far beyond predicting the opening trend of the next day. It answered the question what delta or exposure the traders portfolio should have according to our MAPS indicator. Using Options and/or futures traders can easily adapt their exposure.
A very interesting variable for example is volatility. Increasing volatility just recently lead to the question how it could be explained. What time waves and patterns do cause volatility? What could cause meltdowns and accelerations up or down in prices? Thus new discoveries have been made. Firstly “triggers” that set markets on fire in the nick of time and secondly when does a trigger cycle spark an up trend or down trend? Another discovery has been how to improve the MAPS indicator to show periods of rising and declining markets even better.
Trigger time cycles, consisting of very specific time waves, have been identified which are the proverbial spark for acceleration. Strong waves cause a meltdown or meteoric rise, smaller ones an acceleration. These time waves have a very specific nature causing more or less a panic sell or buy, whereas a price decline can be twice as fast.
The strongest trigger cycle will be called Panic Wave from now on. This time cycle needs to trigger, when it is at its maximum strength, a negative or positive time wave to get started. The more negative or positive the triggered time wave is, the stronger normally the markets, up or down. See where the * has been positioned.
The markets madhouse of February the 5th as well as short term cycles that we were already monitoring before, made us discover the Panic Wave that can cause a panic, smaller or larger. Searching our database we discovered it to happen again on March 3rd and 23rd, which was coming up in the near future. Consequently we warned our customers and interested traders/investors of the upcoming event. First mentioning it to our best customers, then giving a warning in our Newsletter DeLorean.
Next we began to search our historic price and time database for more of the same triggers. Where to start? Well, that was simple. Just looking at major events and price declines in the past would do.
So we checked the US presidential election of 7th November 2016. Bullseye! Maybe it should be labeled as “bearseye”…
We checked Brexit referendum on 21st of June 2016. Bullseye! The next event of course would be 9/11/2001… Spot on!
Now the question was why did it cause a strong down trend? Then the next step comes in, checking if the trigger cycle connected to a very negative cycle. If it connected, consequently markets declined. In addition and logically the MAPS indicator shows for all those periods a decline as well.
There are many more examples of lesser degree supporting the trigger cycle at work. A new child of the fractal time waves was born (discovered), reinforcing the higher degree pattern.
Herewith we have a strong indication of volatility. Very interesting to have a clue at what date a strong trend can develop, which was always the problem in using Elliott Wave. Eventually the trend would come what we were waiting for, but in the meantime, before it came around, traders did experience many false moves. Not so using our time cycles!
Our MAPS indicators which have been developed in November last year show the road to travel in the future regarding the indices. Nicely in line with price movements of the stock indices, they show within precision of one or two days how to adjust long or short positions. A top in the future MAPS indicator predicts a rising trend, a bottom in the indicator a decline. When the indicator is declining and even more so if declining below zero, markets become dangerous. Consequently if so writing puts should be avoided because of risk.
In our newsletters we have reported a couple of upcoming events by looking at the indicator. See the link below to go to the newsletters. You can subscribe to get some extra information for free.
The newsletter of February 7th said:
Most probably the stock markets have only completed the 1st price wave down, the recovery was just a retrace. Again a wave down can be expected to 2450 in the SPX and 12000 in the DAX.
As you can look up in your charts of SPX we did experience a steep decline the 15th, while 23rd/ 24th were hectic and 2-3 March was also very weak in the stock indices.
In this newsletter we published the chart below of the DAX together with the indicators which showed clearly that the period until the 24th of January with the indicator above zero and topping, witnessed a strong market (marked as POSITIVE) while the weak period showed declining markets (NEGATIVE).
A picture tells more then a thousand words. Below we show another published example of SPX with indicator (at bottom of chart) that forecasted the markets:
Last but not least, we will travel to the future:
Again, not always an indicator below zero predicts a sharp decline, but almost every decline or panic shows a relative strong decline in the indicator, most of the time accompanied by a trigger cycle..