Bradley Model

Minor Bradley Model Turn Date Approaching March 8-9, 2008

A minor Bradley Model turn date is approaching March 8-9, 2008, according to Manfred Zimmel of Amanita Market Forecasting.   Although minor, the approaching date is the first such turn since the stock market's major indexes inverted around December 22, 2007, the last major turn date according the website's standard 2008 Bradley Model forecast.  If the model remains accurate, the market volatility should continue as several minor turn dates are approaching in the following weeks -- April 7, April 27, and May 24. 

The next major turn for the standard Bradley Model will occur around June 7, 2008, perhaps just in time for the market to see the full economic impact of the stimulus package.  At this point I believe the June 7th turn date will be inverted, meaning a very strong stock market through the latter part of the year.  Such a scenario would confound the greatest number of investors who have come to subscribe to the "buy in November and sell in May" mantra. This year's summer rally may start in late May - early June, taking the market indexes to new highs just in time for the November election.

Market decline temporary, better times to come for now says Merriman

What does 1981 and 1994 have to do with today?  If you have been reading Ray Merriman's insightful commentary on Schogt Market Timing and The Merriman Market Analyst, then you already know.  According to Merriman, "Jupiter and Pluto come together only every 13 years, and together they can coincide with a sense of urgency, even hysteria..."  Merriman says Pluto is ruler of debt and fear of the worst, so this recent conjunction of Jupiter and Pluto is behind the panic associated with the subprime credit crisis. 

But what does the recent decline have to do with 1981 and 1994? Merriman connects the dots.  "In late 1994 (the last time this signature unfolded) it was the Orange County Municipal Bond default that took place.  In 1981, the time before that, Treasuries were at their lowest levels ever (highest yields ever), as people feared that even the U.S.A. might default, or at least be unable to contain inflation."

Why should you listen to Merriman?  He has been on top on market, predicting this most recent downturn to the day (see earlier post, Merriman predicted market reversal to the day).  So how long will this current decline last?  You will have to read his commentary for the full details, but Merriman says the current crisis is temporary and should end once Jupiter passes Pluto (most likely in early December, but possibly as late as the end of Jauary).   While the current downturn is temporary and the market should return on an intermediate basis, he has more serious concerns for the future.

Next Rosecast Bradley Model Turn Date: November 29

The next Bradley Model turn date is approaching fast, according to the Rosecast Bradley Model developed by Markus Rose of Rosecast.com.  As shown in the graph below, created by A.I.R of Alphee.com, the next turn should occur around Thursday, November 29, 2007, just in time for the year end rally.  We mentioned the Rosecast Bradley Model in an earlier post regarding the October 18th turn date.

The Rosecast Bradley Model has been amazingly accurate this year.  Just take a look at this year's turn dates transposed on the S&P 500 chart below.  Below is the change in the S&P 500 Index at major turning points in 2007:

Februrary 24 - March 12
-3.07%  (Max change > -5%)

March 12 - May 28
+8.32%

May 28 - June 12
-1.50%

June 12 - July 21
+2.07%  (Max change > +3.5%)

July 21 - August 16
-8.01%   (Max change > -10%)

August 16 - October 4
+10.57%

October 4 - November 23
-6.38%  (Max change > -8%)

While the Bradley Model does not predict the direction of the turn, it should alert the investor of a possible change in market trend. Note most of the Rosecast Bradley Model turn dates so far this year have been inverted:  February 24, March 12, May 28, June 12, July 21, and August 16.  However, the October 18th turn date was not inverted.  Will the November 29th turn date be inverted or not?  With the market being oversold on an intermediate basis and a favorable season for a year-end rally, I expect the direct relation in the model.  In other words, the odds favor a market rally in the coming weeks. 

The next major turn date may occur between December 21 (Rosecast Bradley Model) and December 23 (Classical Bradley Model).

Market at critical juncture: Will Bradley Model invert?

Merriman predicted market reversal to the day

What a difference a week makes.  On Thursday, October 11th the Dow Jones Industrial Average, the S&P 500, gold, and crude oil hit new all time highs, while other major world indices followed.  Financial websites and newspapers were filled with optimistic headlines.  However, on October 8th Raymond Merriman wrote the "Planetary cluster forming this week is very tight, and each of the signatures involved have the possibility of coinciding with a reversal in all financial and commodity mark."  He went on to say "this week also finds Mercury turning retrograde on Thursday, which is also the day of the new moon in Libra. Both of these geocosmic events have important historical associations with reversals in many markets."

In the following week's commentary, Merriman noted the Venus-Mars sextle was highly correlated with reversals in the financial and commodity markets, centering on October 11th, plus or minus 3 days.  Merriman has been highly accurate in his predictions.  So is he saying about the upcoming week?

In this week's commentary, Merriman says it's a time of mixed messages from political leaders and economic data which can cause large price swings and fake outs and that stock prices can fall until the time frame from the new moon, Friday, October 26th, until the end of the month.  It should find a bottom by then, if not before, unless prices fall below the August lows.

Rosecast Bradley 2007 turn date October 18

October 18, 2007 marks the Rosecast Bradley turn date as developed by Markus Rose of Rosecast.com.  The recent Rosecast Bradley turn date differs slightly from the Classical Bradley as shown below in the two graphs from Rosecast.  As you can see, the Rosecast model more accurately predicted July 21st and August 16th turn dates in the market.  Rose's rationale behind his model can be found on his website.

Daniel Wiggins comments on the Bradley Model

Daniel Wiggins of Talisker Investment Group comments on the current Bradley turn date in an interview with Ike Iossif of the Marketviews.tv, a subscription based service that interviews leading market advisors.  Although you will need a subscription to hear the latest interview, other interviews by Wiggin's are available on his media site.

Is something worrying the market?

Raymond A Merriman of Schogt Market Timing provided some insight commentary last week.  With the new moon just a few days away on  October 11th, he wrote:

"This is a new moon week, and it happens on the day Mercury turns retrograde. That too is a geocosmic indicator of a reversal in the area of one’s focus. What was important to the market until then is no longer most important. Something else begins to worry the market more."

Be attentive to a change in the market's mood this week.  If a change does occur it may well be a foreshadowing of the Bradley turn date set for October 17th.  Merriman commentary provides insight into the long-term as well as the short-term.

In this week's commentary (October 15, 2007), Merriman expects a reaction to the recent highs set in world markets in conjunction with the new moon.  The probability is high for "sharp price swings in some financial and commodity markets" and recommends being a short-term trader.

Bradley Model turn date approaching

The two charts below show a striking resemblance to one another.  Chart 1  is a chart from Amanita Market Forecasting displaying the major Bradley Model turn dates for 2007 in bold.  Another major Bradley turn date is approaching next week on Wednesday, October 17th.  Chart 2  shows the S&P 500 year-to-date with the Bradley turn dates marked.  The high correlation between the  charts is obvious.

Chart 1: Bradley Model 2007

   

While the Bradley Model is better known for predicting turns in the market and not the direction of those turns, the model has been directly correlated with the market so far this year.   Will that direct relationship continue the remainder of the year?  I can't answer that question, but until proven otherwise I would say the odds favor it.

But how accurate is the turn date?  From Chart 2, we see the model did not pick the exact day of the high in the S&P, but was within a few days.  I suspect options expiration had an influence as well.  If we look at the four major turns dates in 2007 and the corresponding option expirations dates, we find another high correlation. 

Turn Date        Options Expiration
June 14                 June 15
August 26             August 17
October 17           October 19
December 21        December 22

Chart 2:  s&P 500 YTD 2007

While this relationship may only be  coincidental,  it may also be signaling that the turn date may be extended until closer to options expiration or a few days afterwards.   Combined with oversold technical readings of the market, the evidence points to a major trend change in the next few days.  Which way is still debatable, but the evidence is bearish into mid-December before turning up again if the pattern continues.

"The Bradley Model" Interview with Arch Crawford

Ike Iossif, host of Marketviews.tv, interviews Arch Crawford of the Crawford Perspectives on the Bradley Model and other stock market issues.  Crawford is one of the foremost leading authorities on the Bradley Model. 

Source:  StreetIQ
Title:  "The Bradley Model" Interview with Mr. Arch Crawford
Date:   July 22,2007
File Type:  Audio mp3 Download